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Citibank Review: Savings, Checking, CD, and IRA CD and Money Market Accounts

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Citibank Reviews
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You might think of credit cards when you hear the name “Citi,” and you wouldn’t be wrong. This bank — one of the largest banks in the entire world — is well-known for its line of credit cards. But Citibank offers a variety of financial products, including several deposit accounts where you can safely store your cash. But are they any good? And how do their rates and rules compare to other banks?

We’re going to dive into Citibank’s deposit accounts in this review so that you can decide whether it’s right for you or not.

One important note: The rates for each of these accounts vary depending on where you live. To compare consistent numbers, we decided to report rates from South Dakota, because Citibank is headquartered there, in Sioux Falls. Rates are accurate as of Dec. 08, 2017. To see rates for your area, go to Citibank’s website and enter your state.

How Citibank’s checking and savings accounts work

You can’t really get an individual checking or savings account at Citibank. Instead, you have to apply for one of five account packages. That means that when you open a checking account, you’ll also get a linked savings account, and vice versa.

Some account packages come with a monthly maintenance fee, which applies to the account package as a whole. For example, if there is a $30 monthly fee and you don’t meet the requirements to waive it using either your checking or savings account, the fee will be taken out once that month from your checking account.

To make things less confusing, we’ll go through all of the account packages first describing the checking accounts, because these accounts differ the most between account packages. Then, we’ll describe how the savings account works within each of these packages.

Citibank checking accounts

Checking account offer

Citibank is currently offering a great sign-up bonus when you open a new qualifying checking account before December 31, 2017.

To get a sign-up bonus of $300, you’ll have to do three things. First, open a new checking account within a Citibank® Account Package. Second, you’ll have to fund it with at least $15,000 within 30 days of opening the account and keep the money there for at least 60 days. Third, you’ll have to set up a direct deposit into your new account for at least two consecutive months.

If you have a bit more cash on hand, you can earn a larger sign up bonus of $500. Instead, you’ll have to open a premium checking account in a Citi Priority Account Package and deposit $50,000 within 30 days and leave it for at least 60 days. You’ll need to set up a direct deposit for two consecutive months into this account as well to be eligible for the cash bonus.

When applying for a Citibank deposit account, you’ll need to provide basic information about yourself (including your Social Security number) and a valid form of ID. Both offers require you to be a “New-to-Citibank” customer.

Citigold® Package

Myriad exclusive deals and perks for people with a lot of cash

Checking account details:

  • Minimum opening deposit: $0
  • Interest rate: 0.03% APY
  • Monthly maintenance fee: None
  • ATM fees: None
  • ATM refunds: All ATM surcharges from non-Citibank ATMs are refunded for any statement period you are eligible for Citigold®.
  • Overdraft fees: None

The Citigold® account package is more than just a checking account. To qualify for this account package you’ll need to bring a lot of cash to the table: You’ll need at least $200,000 in all linked Citi accounts, whether they be in your deposit, retirement or investment accounts. If your balances dip below that amount, Citi will automatically convert your account to the Citi Priority account package.

But, if you can meet that high bar, you’ll be eligible for numerous perks, even if the interest rate on this savings account is admittedly quite low. You’ll get a personal team to help you navigate the intricacies of all this account package has to offer — and it offers a lot more than just free checks. You’ll get a personal financial adviser, a concierge service and numerous travel perks, as well as discounts and waived fees on various loans, lines of credit and investments. Plus, you can enroll your checking account in Citi’s ThankYou Rewards® program.

You can apply for a Citigold® account online, over the phone, or by visiting a local branch.

Citi Priority Account Package

Nice perks for people with less — but still a lot — of money

Checking account details:

  • Minimum opening deposit: $0
  • Interest rate: 0.03% APY
  • Monthly maintenance fee: $30
  • How to waive monthly maintenance fee: Keep at least $50,000 in linked Citibank accounts, including deposit accounts, retirement accounts and investment accounts.
  • ATM fees: None
  • ATM refunds: Not available
  • Overdraft fees: None

Unlike the Citigold® account, which has no fees, you’ll pay a high monthly fee of $30 with this account unless you can keep at least $50,000 in other linked Citi accounts. If you’re able to do that, though, you can still take advantage of many of the same perks offered to the premium Citigold® members.

You’re eligible to link your checking account with the Citi ThankYou® Rewards program. This account still waives all banking fees, and offers you discounts and waived fees off of investment products, loans, and lines of credit. And while you may not have an entire team waiting at your fingertips, you still have exclusive access to financial advisors to help you make investment decisions.

You can apply for a Citi Priority account online, over the phone or by visiting a local branch.

The Citibank® Account Package

Average account with above-average requirements

Checking account details:

  • Minimum opening deposit: $0
  • Interest rate: 0.01% APY
  • Monthly maintenance fee: $25
  • How to waive monthly maintenance fee: Keep at least $10,000 in linked Citibank deposit, retirement or investment accounts.
  • ATM fees: $2.50 for each non-Citibank ATM use, unless you have at least $10,000 in linked Citibank accounts.
  • ATM refunds: None
  • Overdraft fees: $10 per day when funds are transferred to cover an overdraft.

If you can’t meet the high minimum balance requirements of the Citigold® or Citi Priority account packages, you might consider the Citibank Account. You can enroll your account in Citi ThankYou® Rewards, and your first order of checks is free.

But, you’ll still need to keep a high account balance of $10,000 in linked Citibank accounts to avoid paying the high monthly fee. In return, you earn interest on this account, but it’s a miniscule 0.01% APY.

You can apply for a the Citibank Account in online, over the phone or at a local branch.

Basic Banking Package

A no-frills account—but watch out for high fees.

Checking account details:

  • Minimum opening deposit: $0
  • Monthly maintenance fee: $12
  • How to waive monthly maintenance fee: You can get out of the maintenance fee if you
      1. 1. are 62 years or older
        2. make one bill payment from your account and one qualifying direct deposit into your account each month
        3. keep at least $1,500 in your checking and/or savings account
  • ATM fees: $2.50 for each withdrawal at a non-Citi ATM.
  • ATM refunds: None
  • Overdraft fees: $10 per day when funds are transferred to cover an overdraft.

This account is truly a no-frills version of Citi’s premium checking accounts. Not only does it not pay any interest or earn any Citi ThankYou® Rewards points, but you’ll have to watch out for high fees, as well. If you can’t meet the minimum deposit or age requirements, you’ll also be shelling out $12 per month for this austere account.

You can apply for the Basic Banking account online, over the phone or at a local branch.

Access Account Package

A high-fee checking account—that doesn’t let you write physical checks

Checking account details:

  • Minimum opening deposit: $0
  • Monthly maintenance fee: $10
  • How to waive monthly maintenance fee: There are three options:
      1. 1. Keep at least $1,500 in your account
        2. Make a bill payment from your account
        3. Have at least one qualifying direct deposit into your account each month
  • ATM fees: $2.50 for each withdrawal at a non-Citi ATM.
  • ATM refunds: None
  • Overdraft fees: None

This is a bit of a bizarre account. In exchange for a slightly lower fee ($2 less), you can get basically the same thing as the Basic Banking account but without the ability to write physical checks. If all you need to do is pay bills online, this account might work for you — but as soon as you need to write a physical check, you’re out of luck with this account.

Besides, the requirements to waive the monthly fee are almost the same, though the Access Account lets you slide by with one fewer bill payment/direct deposit per month. If you meet the requirements to have the Access Account maintenance fee waived, why not at least upgrade to the Basic Account and the ability to write physical checks?

If you do decide that this account is right for you, you for a Citi Access account online, over the phone or at a branch.

How Citibank’s checking accounts compare

Citibank’s premium account packages (Citigold® and Citi Priority) offer a lot of perks by way of waived fees and free services. However, unless you have deep pockets, you’ll likely be limited to considering The Citibank Account, Basic Banking or Access Account. These accounts come with high monthly account maintenance fees unless you can qualify for one of the ways to waive these pesky fees.

All of Citi’s checking accounts — even the ones with the nice premium perks — offer very low yields, especially compared to high-interest checking accounts available elsewhere.

Citi® Savings

Generally lackluster interest rates on savings account packages

  • Minimum opening deposit: $100
  • Monthly maintenance fee: For Basic and Access savings accounts, an additional $4.50 monthly maintenance fee applies if they are not linked to checking accounts. For account packages with linked checking and savings accounts, the fee may be charged to the checking account (see above account package descriptions for details).
  • How to waive monthly maintenance fee: For Basic and Access savings accounts, maintain a $500 minimum balance in your savings account or open the savings account with a linked checking account. Requirements for getting maintenance fees waived on other account packages are listed above.

Citi Savings Account (for Citigold®, Citi Priority and The Citibank Account)

 

Annual Percentage Yield (APY) by Account Balance

<$10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000-
$499,999.99

$500,000-
$999,999.99

$1,000,000+

Promotional Interest Rate

0.10%

0.10%

1.00%

1.00%

1.00%

1.00%

1.00%

Standard Interest Rate

0.04%

0.04%

0.08%

0.08%

0.10%

0.13%

0.13%

*As of Dec. 08, 2017

Basic Banking Package

APY by Account Balance

<$10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000-
$499,999.99

$500,000-
$999,999.99

$1,000,000+

Standard Interest Rate

0.04%

0.04%

0.06%

0.06%

0.06%

0.06%

0.06%

*As of Dec. 08, 2017

Access Account Package

APY by Account Balance

<$10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000-
$499,999.99

$500,000-
$999,999.99

$1,000,000+

Standard Interest Rate

0.04%

0.04%

0.06%

0.06%

0.06%

0.06%

0.06%

*As of Dec. 08, 2017

To qualify for the promotional interest rates offered with some of the packages, you’ll need to meet a few requirements. You’ll need to open a new savings account (within an account package) and fund it with at least $25,000. You’ll also need to be 18 years or older, and provide Citibank with a W-9 or W-8BEN. Unfortunately, these promotional interest rates only last for 90 days after you open your account, after which they revert to the much lower standard interest rates.

You can apply for a Citi Savings account online, over the phone or at al branch.

How Citibank’s savings accounts compare

Although Citibank offers good rates as high as 1.00% APY, it’s for a very short period of time and only if you bring a large amount of cash to the table and still meet other requirements.

Once the promotional period has passed, you’ll be left with piddly interest rates in account packages that may not meet your needs and potentially carry high fees to boot. If you’re looking for a low-fee and high-interest-rate savings account, you can do much better with other banks and credit unions like those in the roundup of the best online savings accounts.

Citibank CD Rates

Small earnings, but small early withdrawal penalties as well.

  • Minimum deposit amount: $1,000
  • How interest is calculated: Interest is calculated and paid monthly for CDs with terms longer than one year. For CDs with terms of one year or less, interest may be calculated and paid at maturity.
  • Early withdrawal penalties: For CDs with terms of one year or less, you’ll pay 90 days’ worth of interest. For CDs with terms of over one year, you’ll pay 180 days’ worth of interest. However, you can withdraw the interest at any time without paying a penalty.
  • When the CD matures: It’ll automatically renew for another CD of the same term length but with the current interest rate.
  • Grace period: After your CD matures and renews to another of the same term, you have seven calendar days to add or withdraw the funds penalty-free or change the CD to a different term length.

Citibank says that it offers different rates depending on which account package you open up a CD with. (That’s right — you can’t just go to the bank and open a CD. You need to have an existing account with them first.) But, as you’ll see below, the rates actually are the same for each type of account package.

CD Rates for Citigold® account holders

CD Term

APY by Deposit Amount

Below $10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000+

3 month

0.05%

0.05%

0.05%

0.05%

0.05%

4 month

0.05%

0.05%

0.05%

0.05%

0.05%

5 month

0.05%

0.75%

0.75%

0.75%

0.75%

6 month

0.07%

0.07%

0.07%

0.07%

0.07%

7 month

0.07%

0.07%

0.07%

0.07%

0.07%

8 month

0.07%

0.07%

0.07%

0.07%

0.07%

9 month

0.10%

0.10%

0.10%

0.10%

0.10%

10 month

0.10%

0.10%

0.10%

0.10%

0.10%

12 month

0.15%

0.15%

0.15%

0.15%

0.15%

13 month

0.20%

0.20%

0.20%

0.20%

0.20%

18 month

0.25%

1.01%

1.01%

1.01%

1.01%

2 year

0.25%

0.25%

0.25%

0.25%

0.25%

30 month

0.25%

0.25%

0.25%

0.25%

0.25%

3 year

0.50%

0.50%

0.50%

0.50%

0.50%

4 year

0.50%

0.50%

0.50%

0.50%

0.50%

5 year

0.50%

0.50%

0.50%

0.50%

0.50%

*As of Dec. 08, 2017

CD Rates for Citi Priority account holders

CD Term

APY by Deposit Amount

Below $10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000+

3 month

0.05%

0.05%

0.05%

0.05%

0.05%

4 month

0.05%

0.05%

0.05%

0.05%

0.05%

5 month

0.05%

0.75%

0.75%

0.75%

0.75%

6 month

0.07%

0.07%

0.07%

0.07%

0.07%

7 month

0.07%

0.07%

0.07%

0.07%

0.07%

8 month

0.07%

0.07%

0.07%

0.07%

0.07%

9 month

0.10%

0.10%

0.10%

0.10%

0.10%

10 month

0.10%

0.10%

0.10%

0.10%

0.10%

12 month

0.15%

0.15%

0.15%

0.15%

0.15%

13 month

0.20%

0.20%

0.20%

0.20%

0.20%

18 month

0.25%

1.01%

1.01%

1.01%

1.01%

2 year

0.25%

0.25%

0.25%

0.25%

0.25%

30 month

0.25%

0.25%

0.25%

0.25%

0.25%

3 year

0.50%

0.50%

0.50%

0.50%

0.50%

4 year

0.50%

0.50%

0.50%

0.50%

0.50%

5 year

0.50%

0.50%

0.50%

0.50%

0.50%

*As of Dec. 08, 2017

CD Rates for The Citibank Account, Basic Banking, and Access Account packages

CD Term

APY by Deposit Amount

Below $10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000+

3 month

0.05%

0.05%

0.05%

0.05%

0.05%

4 month

0.05%

0.05%

0.05%

0.05%

0.05%

5 month

0.05%

0.75%

0.75%

0.75%

0.75%

6 month

0.07%

0.07%

0.07%

0.07%

0.07%

7 month

0.07%

0.07%

0.07%

0.07%

0.07%

8 month

0.07%

0.07%

0.07%

0.07%

0.07%

9 month

0.10%

0.10%

0.10%

0.10%

0.10%

10 month

0.10%

0.10%

0.10%

0.10%

0.10%

12 month

0.15%

0.15%

0.15%

0.15%

0.15%

13 month

0.20%

0.20%

0.20%

0.20%

0.20%

18 month

0.25%

1.01%

1.01%

1.01%

1.01%

2 year

0.25%

0.25%

0.25%

0.25%

0.25%

30 month

0.25%

0.25%

0.25%

0.25%

0.25%

3 year

0.50%

0.50%

0.50%

0.50%

0.50%

4 year

0.50%

0.50%

0.50%

0.50%

0.50%

5 year

0.50%

0.50%

0.50%

0.50%

0.50%

*As of Dec. 08, 2017

If you already have an account package with Citi and you’d like to apply for a CD, you can do so online, over the phone or at a branch. All you’ll need to provide is basic information about yourself (including your Social Security number), have a physical address in the United States, and have a valid form of ID.

If you have “issues with your credit history” or are depositing more than $100,000 into your CD, you cannot do so online or over the phone — you’ll have to go and visit a Citibank branch in person.

How Citibank’s CDs compare

Citibank offers very low rates on its CDs, especially compared to high yield CDs you can get elsewhere without having to mess around with account packages.

One clear advantage of Citibank CDs is that the early withdrawal penalties are relatively low. For example, the early withdrawal penalty on a five-year Citibank CD is 180 days’ worth of interest. Discover Bank — which offers much better CD rates — charges a whopping 18 months’ worth of interest if you withdraw the cash early from Discover’s five-year CD. However, Citi’s CD rates are so low, you’d be better off putting money in a high-yield savings account — the best ones offer rates higher than Citi’s CDs — and not worrying about early withdrawal fees. That wouldn’t necessarily be a good strategy in a falling-rates market, but since rates hit a historic low after the financial crisis, we’ve been in a rising-rates market.

Unless you a) already have an existing account with Citibank, b) don’t want to go through the hassle of opening a CD at another institution (it’s not hard, we promise), and c) think that there’s a high likelihood that you’ll withdraw the money early and don’t want to open accounts elsewhere, we wouldn’t recommend a Citibank CD.

Citibank banking IRA

Guaranteed low returns, especially when compared to equity investments

Citibank offers banking IRAs in two flavors: as CDs (with the rates listed in the section above), or as a money market account at an interest rate of 0.20% APY*. These rates are extremely low, especially when compared to higher-yielding IRA CDs.

In general, the returns on IRA CDs and money market accounts don’t even come close to the kind of gains you need to be making while growing your retirement accounts, and Citibank’s banking IRAs are no exception. For example, equities (i.e., stocks and bonds) earn average returns of around 7% per year — far higher than the piddly 0.50% APY that you can get in a best-case scenario with a Citibank CD.

In fact, the rates that Citi offers for banking IRAs are far lower than typical inflation levels (around 3% per year). This means that even if you opt for the highest rates that Citi offers, your money won’t even keep pace with inflation over time and you’ll be left with less and less each year (albeit at a guaranteed rate).

Overall review of Citibank

Although Citibank offers some great credit cards (such as the Citi® Double Cash Card and Citi® Simplicity Card), they fall short in the deposits department.

Citibank does offer some nice perks, such as some accounts being eligible for Citi’s ThankYou® Rewards program. The Citigold® and Citi Priority account packages come with features that can save you money and make your life easier, if you have the deep pockets required for these account packages.

All-in-all, while there are some bright spots to Citibank’s accounts, you can earn higher rates and pay lower fees at other banks and credit unions.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Earning Interest

Best Money Market Rates & Accounts – December 2017

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Updated December 1, 2017

Traditional banks are paying very low interest rates on money market accounts. For example, Bank of America pays between 0.03% and 0.06% APY. Fortunately, you do not need to settle for such ridiculously low rates. You can easily find the best money market rates at internet banks paying 1.30% or more. If you put $50,000 into Bank of America’s account at 0.03%, you will only earn $15 of interest over one year. That same money in an account paying 1.30% would earn you $675 of interest. And you can typically open and fund an online money market account in less than 10 minutes.

MagnifyMoney has searched for money market accounts paying the highest interest rates – and this list gets updated monthly. Here are the best rates for November 2017:

1. Top Rate: UFB Direct – 1.41% APY, $5,000 minimum balance to avoid a monthly fee

Money Market Account
UFB Direct is a division of BofI Federal Bank, a federally chartered, publicly traded and FDIC-insured bank based in San Diego. In recent months, UFB Direct has become increasingly aggressive with high rates targeting big balances. The APY of 1.41% is the highest that we have found. However, there is one catch. You need to keep at least $5,000 in the account in order to avoid a monthly maintenance fee of $10.00. You will get a Visa debit card and have access to limited check writing. We think this is the best option for people with big balances that they want to keep in a money market account.

2.Favorite Online Package: Ally – 0.90% APY, no minimum deposit, and link to free checking

Money Market Account
Ally Bank is a very popular internet-only bank. Although the interest rate on the money market account is not the highest, Ally does offer a very competitive overall package – particularly if you link the account to an Ally checking account. The checking account has no minimum balance and no monthly fee. You can link your money market account to your checking account to provide overdraft protection. Money would be transferred to your checking account with no transaction fee if you ever made a mistake. You would be able to access your money market account with your Ally ATM card, which has free AllPoint access and up to $10 of non-Ally ATM fees reimbursed every month. This money market account is a nice way to provide yourself with overdraft protection while earning interest. If you don’t need check-writing capabilities on your savings, you would still be better off with Ally’s savings account.

on Ally Financial’s secure website

3. Top Choice: Sallie Mae – 1.30% APY, no minimum balance and checks available

Money Market Account
If you have student loan debt, you probably are not very excited to see Sallie Mae at the top of this list. However, many people are unaware that Sallie Mae also operates an internet-only FDIC-insured bank with some of the best interest rates in the country. You can earn 1.30% APY, compounded daily and paid monthly. There is no minimum balance and no monthly maintenance fees. You will have check-writing capabilities (although the standard money market limit of six per month applies to this account). The easiest (and best) way to fund and access your funds is via electronic transfer from your existing checking account. If you want a simple account with no fees and check access – this is a good bet. Sallie Mae has just recently increased the APY (it was previously 1.15%), making this one the best rates in the country.

4. High Rate: Self-Help Credit Union – up to 1.37% APY, $500 minimum deposit and minimum balance

Money Market Account
Self-Help is a credit union that anyone can join. If you don’t live, work or worship in one of their eligible counties, you can join by donating $5 to the Center for Community Self-Help. The contribution is tax deductible and will make you eligible for credit union membership. (You can learn more about how to join the credit union here.) At a credit union, your funds are insured up to $250,000 – but it is by the NCUA instead of the FDIC. The money market offers an APY of 1.27% on balances from $500 to $500,000. Even better – you can earn 1.37% APY on balances above $500,000. However, you need to deposit at least $500 and the balance during the month cannot go below $500 – otherwise you will be charged a monthly maintenance fee. You are allowed 6 free withdrawals or transfers from the account each month (including checks).

5. Good Rate: EverBank – 1.31% APY, $5,000 minimum deposit (1-year intro APY)

YIELD PLEDGE MONEY MARKET
EverBank, recently acquired by TIAA-Cref, is a rapidly growing bank that conducts most of its business online (even though it is based in Florida). In 2017, EverBank has become very aggressive on interest rates. Its products have regularly made our list of best CD rates, and – not surprisingly – it also appears on the best money market list. This is a great product, but you should be aware of a few pieces of fine print. The APY is only valid for one year. EverBank does promise that the rate, after the first year, will “never stray from the top 5% of competitive accounts.” Just be prepared for a lower rate after 12 months. You need at least $5,000 to open the account. You will only earn the 1.31% APY on balances up to $250,000. There is no monthly account fee.

6. Great Rate: Capital One 360 – 1.30% APY on balances above $10,000 (0.60% on balances below)

360 Money Market<sup>®</sup>
Capital One is a famous credit card issuer (we are all familiar with the ad that asks us what is in our wallet). But many people don’t realize that Capital One also operates a large online bank that pays highly competitive rates. In 2012, Capital One acquired ING Direct and re-branded it Capital One 360. With its money market account, you can earn a good rate for balance below $10,000 and one of the best rates in the country for balances above $10,000. Deposits are FDIC insured, up to the legal limit.

7. Great Rate for Small Deposits: All America Bank – 1.50% APY on balances up to $35,000

Mega Money Market

All America Bank is a small community bank based in Oklahoma. The bank was established in 1927 and deposits will be FDIC insured, up to the legal limit. Although most of the bank’s lending activity is centered around Oklahoma, it has decided (like many other community banks) to raise deposits nationally, online. The “Mega Money Market” account is very attractive for people with smaller deposits. You can earn 1.50% APY for balances up to $35,000. Balances above $35,000 will earn 0.50%. You will get a free debit card (Visa) and there are no monthly maintenance fees. Like all money market accounts, you are limited to 6 deposits per month. At All America, you would be charged $5 for each additional withdrawal. The APY is subject to change. If you have a big deposit, consider one of the accounts higher on the list. But if you are looking for extra yield on a smaller deposit, this could be a good choice.

8. High Rate: ableBanking – 1.30% APY, $250 minimum, but no check-writing

Money Market Savings
ableBanking is a division of Northeast Bancorp, a community bank headquartered in Maine since 1872. The bank has over $1 billion in assets, and your deposit would be FDIC insured up to the legal limit. At 1.30% APY, this is the highest money market rate that we have been able to find (from a bank) in the country. There is now a minimum deposit of $250, no monthly fee and you do not need to be a resident of Maine (any US resident can open an account). Unfortunately, the account does not come with check-writing privileges and there is no ATM access. You can deposit and access your funds via ACH (electronic transfer), which can take a couple of days. Just remember: there is a limit of 6 withdrawals per calendar month. When we called to ask questions about the account, we could reach a customer service representative very quickly. This is a good new option (just added to the list in June) from a small bank with a great high rate.

3 Questions To Ask Before Opening A Money Market Account

1. Should I open a savings account or a money market account?

Many years ago, money market accounts were higher risk and paid higher returns. The financial crisis of 2008 changed all of that. Money market accounts are now FDIC-insured up to the legal maximum ($250,000 per institution per individual). Interest rates are now very similar – and there is no material difference. In other words – choose whichever account you want.

In general, you tend to get slightly lower interest rates on money market accounts because you have check-writing capabilities. The best savings accounts pay at least 1.15% APY – very similar to the rates on this page. But at Ally, for example, you can get 1.00 APY on a savings account (no check-writing) and 0.85% on the money market account (with check writing).   

We have written a full explanation of the difference between money market and savings accounts here.

2. Am I willing to make a longer term commitment? 

Savings accounts and money market accounts pay much lower interest rates than CDs. Right now you can easily get a 1-year CD paying 1.35% APY (with only a $2,000 minimum). You can find the best CD rates here. If you build a CD ladder, you can take advantage of 5-year rates that are now as high as 2.30%.

Money market accounts are great places to keep money that you might need immediately. But the interest rate on a money market account can change right away, at the bank’s discretion. To lock in a higher interest rate, you should consider a CD. If you need to get access to your CD early, would forfeit interest (typically from 3-6 months). In most circumstances, putting more of your money into CDs can really help boost your returns.

3. Is a money market account the same as a money market fund? 

No, money market accounts (offered by FDIC-insured banks) are not the same as money market funds (most likely sold by your broker). In fact, we really don’t know why people even buy money market funds in the current environment.

For example, Vanguard offers the Prime Money Market Fund. Like other money market funds, this one “invests in short-term, high-quality securities.” Its objective is to keep the fund trading at $1 and generate a decent return. Right now that return is 0.89% – a bit lower than the returns you see from the money market accounts listed in this article. However, money market funds do not have FDIC insurance.

Most people compare the return of a money market fund (sold by their broker) to the interest rate paid by a traditional bank (0.03%, sold by their local bank teller). As a result, they are willing to take the risk of a money market fund. However, as you can see from the best money market accounts in this article, you can get FDIC insurance and beat the return of most funds. Why earn 0.89% with no FDIC-insurance when you can easily earn 1.05% and have FDIC insurance.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Review: American Express Personal Savings High Yield Savings Account

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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There’s no question having a savings account is necessary to get your financial house in order. Savings accounts are great for storing your emergency fund, planning for upcoming purchases like travel or special events, and more. But it can be frustrating to earn little interest on your money while it’s sitting in a savings account at a physical bank, which is why many people have turned to online banks where interest rates on savings and checking accounts are typically higher.

Online banks are able to offer higher interest rates on savings and checking accounts because there are less overhead costs than for brick-and-mortar banks. One online savings account option to consider is an American Express Personal Savings High Yield Savings Account.

American Express Personal Savings High Yield Savings Account Overview

The American Express Personal Savings High Yield Savings Account currently offers 1.15% annual percentage yield (APY). However, this interest rate is subject to change without notice, which is pretty typical for most online banks. There is no minimum deposit required to open an account, but the funds must come from an external account under your same name held at a different bank. Your initial deposit must be sent within 60 days of being approved or your account will be automatically closed.

There are no monthly maintenance fees associated with this savings account, and you can link it to more than one financial institution or current bank account to make deposits and withdrawals.

Funds are FDIC insured up to the legal limit. 

Making a Deposit into an American Express Personal Savings High Yield Savings Account

Once your account has been opened and initially funded, you will need to link any other external checking or savings accounts to your American Express Personal Savings account in order to transfer funds electronically. External accounts must belong to you and have the same ownership as your Personal Savings account. After you have entered your account information to link it, you will be sent test deposits of small amounts to verify your information is correct.

Funds transferred electronically are generally available within five business days.

In addition to electronic transfers, you can deposit physical checks by mail. If you write a check from another bank, make it payable to American Express Bank, write your Personal Savings account number on the memo line, and mail it to:

American Express Bank, FSB

P.O. Box 30384

Salt Lake City, UT 84130

If you send a check made payable to you, sign the back and under your signature write “for deposit only in account” followed by your Personal Savings account number. However, it is more secure to send a check made out to American Express Bank. American Express does not accept cash deposits by mail.

The maximum account balance you can have in an American Express Personal Savings account is $5 million.

Withdrawing Funds from an American Express Personal Savings High Yield Savings Account

A Personal Savings account with American Express is not meant to be used for everyday spending and other transactions, and thus does not come with an ATM card, debit card, or checks. The Federal Reserve Board’s Regulation D allows a maximum of six transfers or withdrawals per statement period for savings accounts and money market accounts within any bank.

That said, withdrawing funds electronically is just as easy as depositing them. You can make transfers to your linked external accounts within your account online. Transfers to external accounts can take one to three business days, if the account is already linked to your Personal Savings account.

Keep in mind internal transfers from one American Express Personal Savings High Yield Savings Account to another will count toward the limit of six withdrawals per month.

However, if you call and request an official check by mail, this will not count toward the limit.

Pros and Cons

Overall, there are more pros than cons with this account. No monthly fees and a higher interest rate on savings is a big pro versus keeping your money in a savings account at a brick-and-mortar bank. Also, there is no minimum required to open or maintain an account. Even with a $0 balance, American Express will not close your account unless it has been inactive for over 12 months.

However, one disadvantage to keeping your money in an online savings account is the waiting period it takes to access your money. It can take one to three business days to transfer your money to an external account. This can be an inconvenience if you are facing a financial emergency, which is why it’s a good idea to always keep a buffer in your checking or savings account in your physical bank.

Alternatives to the American Express Personal Savings High Yield Savings Account

There has been a price war for online savings accounts. American Express offers an excellent yield of 1.15% APY, which is one of the highest in the market. If you want to see how Amex stacks up against the competition, you can see our list of the best savings accounts here.

Who Will Benefit Most from an American Express Personal Savings High Yield Savings Account?

Anyone looking to earn money on their savings will benefit from an American Express Personal Savings High Yield Savings Account. Just remember you are limited to no more than six withdrawals or transfers per statement period, and it can take up to three business days to receive your money in an external account.

Kayla Sloan
Kayla Sloan |

Kayla Sloan is a writer at MagnifyMoney. You can email Kayla at Kayla@magnifymoney.com

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