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Updated on Friday, January 1, 2021
What you need to know about the American Express savings account
American Express Savings Account Features
Minimum Deposit Amount
Permitted Monthly Withdrawals
Up to 6
Deposits will be available within five business days. Transfers from savings to a checking account take one to three business days.
In an American Express High Yield Savings account, your money earns 0.50% APY. It isn’t the highest rate you can currently earn from an online savings account listed on our site, but it’s still well above average. The account charges no monthly fee and requires no minimum deposit, making it an affordable account to open. You must fund your account within 60 days of applying for the account. If you’re concerned about safety, know that the FDIC insures your deposits of up to the legal limit.
The account appears to be a great option for savers who want the flexibility of earning a high interest rate on a large sum without the withdrawal restrictions of a certificate of deposit (CD).
How the American Express savings account works
The savings account compounds interest daily. It’s current APY 0.50%, and amount earned is credited to your account on your monthly cycle date. The rate is variable, which means that American Express can raise or lower the interest rate at any time without notice to you before or after the savings account is opened.
Account holders must fund the account within 60 days, which you can do by setting up a bank transfer or direct deposit to the savings account. If you prefer a physical method, you can send a check.
Federal law mandates certain types of telephone and electronic withdrawals, including transfers from savings accounts up to 6 per statement cycle. This applies consistently across savings accounts.
What we like about the American Express savings account
- High APY: The account’s 0.50% APY is better than what you would earn by putting your money in the accounts offered by most brick-and-mortar banks. In fact, it’s within 0.3% of the highest-yielding savings accounts. While there could be higher rates available elsewhere, this account remains a solid choice based on yield.
- Automatic savings: It’s easy to make saving automatic when you have an online savings account. With the American Express High Yield Savings account, you can easily set up a recurring deposit to pull funds from an external savings or checking account. To make your saving automatic and without emotion, you can even have a portion of your paycheck directly deposited to the account.
- Spending discouraged: With your money in an online account like the American Express High Yield Savings account, you can get your cash only after making a transfer to an external checking account to which you have debit card access. The minor inconvenience could be just enough to keep you touching the account and making unnecessary withdrawals.
What we don’t like about the American Express savings account
- No ATM card, no checks, no debit card: Not having card access is great when you need to prevent yourself from spending your savings. But the hassle of setting up and making an Automated Clearing House (ACH) transfer from your online American Express savings account can be problematic if you need immediate access to your funds. Also, the account terms state that transfers can take one to three business days for funds to become available in your checking account. If you’re worried about this, there are alternative high-yield accounts you can use that offer an ATM card linked to the account.
- Variable APY: The annual yield American Express is offering on this savings account is high at 0.50% APY, but the bank can change that rate at any time and for any reason. If you’re looking for a more predictable rate of return, consider a certificate of deposit. CDs might not offer competitive yields, but you will know exactly what your return will be.
- Limited withdrawals: Because this is a high-yield savings account, Federal law mandates certain types of telephone and electronic withdrawals, including transfers from savings accounts up to 6 per statement cycle. Some savers have a separate account for emergencies in case they max out their savings withdrawal but still need immediate funds.
American Express vs. top online banks
|American Express Savings vs. Other Online Savings Accounts|
|Vio Bank||Barclays Bank||Marcus by Goldman Sachs||American Express|
|Minimum Deposit Amount||100||none||none||none|
|Permitted Monthly Withdrawals||6||6||6||6|
|Deposit Speed||Deposits will be made available in two to five business days||Deposits will be made available within five business days||Deposits will be made available the next business day||Deposits will be made available within five business days|
As indicated earlier, the American Express High Yield Savings account offer is strong, but it’s not the best available. To see how it compares, we enlisted MagnifyMoney’s team to shed light on some national, online-only banks with a health rating of a B or better and with the highest APYs on savings accounts — as listed on DepositAccounts.com, another LendingTree site. If there was a tie, we chose the bank with the lower required deposit. Here are a few alternatives to the Amex high yield savings account.
Vio Bank-MidFirst Bank – High Yield Online Savings Account, 0.57% APY, $100 to open (no ATM card)
The Vio Bank High Yield Online Savings Account is a solid choice for savers. The high APY and low minimum deposit make this account extremely attractive not only for savers but investors as well, as the interest rate outperforms most CD rates available at competitive banks.
The ACH transfers seem to take little time – between two to five business days – and you are limited to six withdrawals per billing cycle, but the positives outweigh the negatives. It isn’t commonplace to find an online savings bank with an app but Vio Bank delivers, all without charging monthly maintenance fees.
Barclays Bank – Online Savings Account, 0.40% APY, no balance to open, no monthly maintenance (no ATM card)
Barclays Bank, one of the largest in the world, seems to offer an account that competes against the best of the other online banks. A high APY and no minimum account balance – not to mention no balance required to open – make this an attractive choice.
The Barclays landing page for this account makes it easy for you to set savings goals and open the account. The APY may only be slightly higher than the American Express Savings account, but the ease of use and customer service give Barclays a distinctive edge.
Marcus by Goldman Sachs – High-Yield Online Savings Account, 0.50% APY, no minimum deposit (no ATM card)
Savers can earn a competitive 0.50% APY in their Marcus by Goldman Sachs® High-Yield account, making deposits up to $1,000,000 per account. The account needs to be funded within 60 days via transfer, direct deposit, check or wire. Marcus by Goldman Sachs doesn’t charge any fees or service charges.
Like with most accounts of this type, there isn’t any ATM access, and savers will need to withdraw their money via ACH transfer, wire transfer or check. Still, the account allows high balances and boasts a healthy APY, making it a smart choice – one that appears to outpace the American Express account.
American Express CD Rates
CDs from American Express do not require a minimum deposit amount. You’re free to deposit as little or as much as you want to begin earning interest on any of its CD terms. This is great for individuals who don’t have a lot of money to deposit in CDs offered by other online banks. The downside is that you won’t be receiving as high of an APY as you could at other online banks.
How CDs offered by American Express work
American Express offers terms spanning from 6 months to 5 years on its CDs. Interested is credited on a monthly basis and compounds until the CD matures. You can choose to have the interest transferred out of the CD and into the American Express High Yield Savings Account on a monthly basis, transferred into a linked account, or mailed to you monthly, quarterly or annually via a check. If you touch the principal, however, you’ll incur an early withdrawal penalty. The penalty is based on your CD’s term:
- For CDs with a term of less than 12 months: 90 days’ worth of interest
- For CDs with a term of 12 months, but less than 48 months: 270 days’ worth of interest
- For CDs with a term of 48 months: 365 days’ worth of interest
- For CDs with a term of 60 months: 540 days’ worth of interest
If you’re able to keep your principal and interest within the CD, you’ll receive notice, either by mail or email, that your CD is about to mature in 10 days. If you don’t tell American Express that you do not wish to renew your CD, it will automatically be renewed for the same term unless the bank no longer offers that term. You can call American Express any time before your maturity date to tell them that you do not wish to have your CD automatically renewed.
Online banks vs. brick-and-mortar banks
Online banks have been experiencing growth that outpaces that of their physical counterparts not only because of the rise in mobile banking among consumers due to convenience, but also because the online banks can offer more benefits as they don’t have to deal with as many overhead expenses as brick-and-mortar banks do.
A 2017 study by DepositAccounts.com, another subsidiary of LendingTree, showed the annual percentage yield that internet banks offer on savings accounts was more than four times of what brick-and-mortar banks or credit unions offer.
Simply put, the main benefit of putting your money in an online savings account is your money does more for you than it might in a traditional savings account. In its 2017 study, DepositAccounts provided an example based on the average APYs in certain savings categories: If a saver were to put $100,000 in a savings account and leave it alone for 10 years, he or she would earn $8,338.79 at an online bank versus $1,747.04 in a brick-and-mortar bank and $1,895.28 in a credit union. This test assumed a fixed APY.
Overall Review of the American Express High Yield Savings Account and CDs
Overall, the American Express High Yield Savings Account is a solid, high-yield online savings option. The interest rate it offers is high, and the features of the account are comparable to other online banks’ savings accounts. The account also carries the cachet of the American Express name. While there are certain aspects of the High Yield Savings account that could be improved, other online banks appear to encounter similar obstacles.
American Express CDs, when compared against those by other banks, don’t quite measure up. The interest rates of the 6-month and 12-month CDs are nowhere near the best rates offered by other online banks, as seen in our rankings, and the rates on the 18-to-60-month CDs fall short of the other rates offered. The only feature that makes American Express stand out from most of the other online banks is that it doesn’t require a minimum deposit to open an account and start earning interest. If you’re not quite ready to deposit a huge chunk of money into a locked account, you may want to start out small with one of the CDs offered by American Express.