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Reviews

PenFed Credit Union CD Rates, Checking, Savings, Money Market, and IRA Accounts

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

PenFed Money Market Certificates

High rates, great dividend payment, and renewal flexibility make this a great choice.

Term

APY

6 months

1.60%

12 months

1.70%

15 months

1.70%

18 months

1.75%

2 years

1.75%

3 years

1.80%

4 years

1.85%

5 years

1.85%

7 years

1.90%

  • Minimum opening deposit: $1,000
  • Minimum balance amount to earn APY: $1,000
  • Early withdrawal penalty:
    • For a six-month CD, you’ll forfeit any dividends earned (if you withdraw the amount before 90 days), or a full 90 days’ worth of dividends (if you withdraw it after 90 days, but before the CD matures)
    • For a longer-term CD, you’ll forfeit all dividends earned (if you withdraw the amount within the first year), or 30% of what you would have earned if you kept the CD to maturity (if you withdraw the amount after one year, but before the CD matures)

One of the nice things about PenFed’s CDs is that they are very flexible in terms of how your dividends are paid out and what happens to the CD upon maturity.You can choose to have dividends reinvested into your CD or paid out each month by direct deposit into another PenFed Credit Union account, or mailed to you as a check. Of course, it’s always best to leave the dividends to pile up in your CD. If you choose to have dividends paid out, your APY may be lower than the stated rate.When you set up your CD, you’ll choose what happens at maturity. You can choose from three options: Renew the CD for the same term, deposit the funds into another PenFed account, or have a check mailed to you. There is no grace period for you to choose what happens after it matures as with most banks; rather, you choose upfront. However, you can change your mind at any time.The only down side of this CD is that you cannot make a partial withdrawal. If you need to withdraw the cash early, you can only remove the full amount. If you do need to withdraw the money, you can also only do so after giving written notice.

How to get a PenFed Money Market Certificate

To get a PenFed Money Market Certificate, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your CD with a minimum deposit of at least $1,000.

PenFed Credit Union will mail you a signature form to complete your account application, but you can still open new accounts online before completing this final check mark.

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

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How PenFed’s CDs compare

PenFed offers very competitive rates on their CDs. Each of their CDs carry a higher-than-average interest rate. These high rates, combined with flexibility on how you earn dividend payments and how the CD is renewed, make this a great choice for people looking for a well-rounded CD option from a credit union.

Still, if earning the top rates are your priority, there are currently higher CD rates out there with certain banks.

PenFed’s Coverdell Education Savings Certificates

Lower minimum deposit requirements make this account more accessible for parents.

Term

APY

1 year

1.60%

2 year

1.65%

3 year

1.70%

4 year

1.75%

5 year

1.95%

7 year

1.80%

  • Minimum opening deposit: $500
  • Minimum balance amount to earn APY: $500
  • Early withdrawal penalty:
    • If you withdraw the CD before one year has passed, you’ll forfeit any dividends earned
    • If you withdraw the CD after one year has passed, you’ll pay a penalty equal to 30% of what you would have earned if you had kept the CD to maturity

PenFed’s Coverdell Education Savings Certificates are a great tool to save for college. These CDs have a lower (i.e., more accessible) minimum account opening requirement than their regular Money Market CDs—just $500. You can contribute up to the maximum yearly amount set by the IRS—currently $2,000 for 2018—to this Coverdell account.

When you set up your account you can choose what happens when the CD matures: either renew the CD for a similar term, or deposit it into a new Coverdell Education Share account. Unlike PenFed’s regular CDs, you do have the option to make a partial withdrawal during the term of the CD if needed, provided that it doesn’t drop the amount in your CD below $500 (if that happens, the entire CD will be closed and deposited into a Coverdell Education Share account). If you do make a partial withdrawal, that amount will also be subject to the early withdrawal penalties described above.

How to get PenFed’s Coverdell Education Savings Certificates

To get a PenFed Coverdell Education Savings Certificate, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your Coverdell account with a minimum deposit of at least $500.

Once your application is complete, or if you’re already a member, you can open any new financial product directly in your online account. PenFed Credit Union will mail you a signature form. However, you can still open new accounts before completing this final check mark.

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

PenFed checking account

Great interest rates, but make sure you can meet the requirements to waive the monthly fee.

APY

Account Balance

0.20%

Up to $19,999.99

0.50%

$20,000 - $50,000

  • Minimum opening deposit: $25
  • Monthly account maintenance fee: $10
  • How to avoid the account maintenance fee: Keep a daily balance or monthly direct deposit of $500 or more
  • ATM fee: None for using either a PenFed ATM or a non-PenFed ATM; however, if using a non-PenFed ATM, the ATM’s owner may charge you a surcharge fee
  • Overdraft fee: $30

Unfortunately, this checking account does charge a monthly fee, but if you have a job with a direct deposit paycheck or at least a little bit of cash, it’s not a hard fee to skirt around.

What we really like about this account is that it charges zero ATM fees, except for any surcharge fees an out-of-network ATM owner would charge (but that’s out of PenFed’s control). If you’re looking for a high-interest-earning checking account and use the ATM a lot to get cash, this would be a great checking account for you.

How to get PenFed’s checking account

To get a PenFed Checking Account, you’ll need to be a member. Simply complete the application, deposit a Share savings account with at least $5 and join either the Voices For America’s Troops or National Military Family Association for a one-time $17 fee (if you don’t qualify based on your employment).

Once your application is complete, or if you’re already a member, you can open any new financial product directly in your online account. They will mail you a signature form, however you can still open new accounts before completing this final check mark.

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

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How PenFed’s checking account compares

We really love PenFed’s checking account for several reasons. It has a great interest rate, especially considering that many banks still don’t pay anything at all. PenFed Credit Union also does not charge any ATM fees with this account (although again, the other bank’s owner may charge you a surcharge fee), making this a cheaper option for folks who frequently use cash.

While this is a great checking account, it is possible to find better online checking accounts out there that offer higher interest rates, no monthly fees and ATM surcharge fee reimbursements.

PenFed Money Market Savings Account

PenFed offers very low rates for this account, even with a high balance amount—you can do much better elsewhere.

APY

Account Balance

0.05%

Up to $9,999.99

0.10%

$10,000 - $99,999.99

0.15%

Over $100,000

  • Minimum opening deposit: $25
  • Monthly account maintenance fee: None
  • ATM fee: $1.50 for a withdrawal and $1.00 for a balance inquiry (including at in-network PenFed ATMs)
  • ATM fee refund: None
  • Overdraft fee: $30
  • Excessive transaction fee: $10 if you exceed 6 certain transactions per month

PenFed’s money market account is designed to earn higher rates than their regular savings account, and that’s exactly what this account does — but only if you bring at least $10,000 of cash to the table to earn the second-tier or third-tier interest rates.

Although this account doesn’t have a monthly account maintenance fee, there are other fees to watch out for. You don’t typically use ATMs with a money market account as with a checking account, but if you do need to use an ATM, you’ll pay a $1.50 fee to make a withdrawal, even at an in-network PenFed ATM.

A better way to get your cash out of this account is with an account transfer (just don’t make over six in one month to avoid the excessive transaction fee), or with the free checks that they offer with this account.

How to get PenFed’s Money Market Savings Account

To get a PenFed Money Market savings account, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your Money Market savings account with a minimum deposit of at least $25.

They will mail you a signature form to complete your account application, however you can still open new accounts online before completing this final check mark.

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

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How PenFed’s money market account compares

As far as interest rates go, PenFed’s money market account is very low. In fact, you can earn even higher interest rates by keeping your money in PenFed’s checking account, which is strange.

Furthermore, we find it odd that they charge you to make an ATM withdrawal from this account — even from their own ATMs. At least they offer free checks, but that won’t help you much if you need cold, hard cash pronto.

If you’re looking for better rates and terms on a money market account, you can find better money market accounts elsewhere.

PenFed Savings Account

An overall lackluster savings account that offers a low rate and charges for ATM withdrawals.

APY

Minimum Balance Amount

0.05%

$5

  • Minimum opening deposit: $5
  • Monthly account maintenance fee: None
  • ATM fee: $1.50 for a withdrawal and $1.00 for a balance inquiry (including at in-network PenFed ATMs)
  • ATM fee refund: None
  • Overdraft fee: $30
  • Excessive transaction fee: $10 if you exceed six certain transactions per month

This is the basic account that you need to become a PenFed member and open any other account. It’s designed as a free savings account and does pay a small amount of interest, but don’t expect much more from it than that.

Furthermore, if you ever need to take out cash from this account, you’ll pay a $1.50 per ATM withdrawal, even if you use a PenFed ATM. And unlike with their money market checking account, you don’t get free checks with this account. That means the only way you can make a free transaction into or out of this account is either online or by visiting a branch in-person.

How to Get PenFed’s Savings Account

To get a PenFed savings account, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your savings account with a minimum deposit of at least $5.

The credit union will mail you a signature form to complete your account application, however you can still open new accounts online before completing this final check mark.

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

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How PenFed’s Savings Account compares

We’ll be honest here. The interest rate on PenFed’s savings account is awfully low compared with its competitors. You likely won’t earn much with this account, especially compared with other online high-interest savings accounts.

Furthermore, we don’t like the fact that you need to pay to use an ATM with this account, even for in-network PenFed ATMs. Most banks at least let you use their own in-network ATMs for free, so the fact that you need to pay to do so with this account seems silly.

However, even though all members are required to open this account when establishing their membership with PenFed, it doesn’t mean you have to use it. It’s perfectly fine to let it sit idle with the $5 minimum deposit since there are no monthly account maintenance fees. We instead view this account as a pesky requirement for working with the credit union if you’d like to use one of their other financial products.

PenFed IRA CD accounts

No fees on partial withdrawals for those ages 59 ½ and over make this a great account choice for mature consumers.

Term

APY

1 year

1.60%

2 years

1.65%

3 years

1.70%

4 years

1.75%

5 years

1.75%

7 years

1.80%

  • Minimum amount to open an account: $1,000
  • Minimum amount to earn APY: $1,000
  • Early withdrawal penalty:
    • If you withdraw the money in the first year, you’ll forfeit all dividends earned
    • If you withdraw the money after one year but before the CD matures, you’ll pay 30% of what you would have earned if you kept the CD to maturity

At first glance, PenFed’s IRA CDs look pretty run-of-the-mill. The minimum opening deposit is fairly high, especially if you’re a young saver just looking to start out. In fact, IRA CDs are fairly conservative investments anyway, and the people who can get the most benefits from them are mature folks nearing — or already at — retirement.

But what makes these IRA CDs really stand out as better options for more mature savers is that you can make partial early withdrawals from your CD completely penalty-free, assuming that you’re 59 ½ and over. If you need to take out the cash in retirement early, rest assured it won’t cost you anything to withdraw, as long as you leave at least $1,000 in the CD for it to stay open.

How to get a PenFed IRA CD

To get a PenFed IRA CD, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your IRA CD with a minimum deposit of at least $1,000.

They will mail you a signature form to complete your account application, however you can still open new accounts online before completing this final check mark.

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

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How PenFed’s IRA CDs compare

While PenFed doesn’t exactly offer the highest interest rates on their IRA CDs, they’re pretty darn close. If you’re looking to get as high in returns as possible it’s tough to go wrong with them, but you may be able to earn more with other IRA CDs.

The thing that stands out the most with PenFed’s IRA CDs is that people who are over age 59 ½ can make partial withdrawals from these CDs without paying any early withdrawal penalties (assuming they keep at least a $1,000 balance in the CD to keep it open). This is a really unique feature, and it’s why we would recommend PenFed’s IRA CDs to older adults looking to keep their options flexible.

PenFed IRA Savings account

Low interest rates make this an OK place to store your retirement funds, but not to grow them.

APY

Minimum Balance Amount

0.05%

$25

  • Minimum opening deposit: $25
  • Monthly account maintenance fee: None

Remember how everyone is required to open up a PenFed savings account and fund it with at least $5 if they want to become a member? This account is the IRA version of that. Specifically, if you want to open up an IRA product — such as one of PenFed’s IRA CDs — you’ll need to open up one of these accounts as well.

This will be the default account that your IRA CD money is deposited into if you elect not to have the IRA CD auto-renew when it matures. It’s a great place to store your money in the short term until you withdraw it for retirement or move it to another IRA investment, however, it’s not a great place to grow your money due to the lackluster interest rate.

How to get PenFed’s IRA Savings account

To get a PenFed IRA savings account, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your IRA savings account with a minimum deposit of at least $25.

They will mail you a signature form to complete your account application, however you can still open new accounts online before completing this final check mark.

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

PenFed IRA Premier Account

The exact same account as PenFed’s regular IRA Savings account, just with a higher minimum balance requirement.

APY

Minimum Balance Amount

0.05%

$10,000

  • Minimum opening deposit: $10,000
  • Monthly account maintenance fee: None

If you have at least $10,000 to keep in your retirement savings account, you can choose to open PenFed’s Premier IRA Savings account. There is no real benefit of using this account over PenFed’s regular IRA Savings account, because the exact interest rates are currently being offered for both accounts.

Typically, the more money you bring to the table, the higher the interest rate you can earn (as with PenFed’s Money Market Savings account), however that is not the case with this account. That could change in the future, however, if the credit union does decide to increase their interest rates for this account. But right now, we can’t really see any reason why you’d specifically choose this account over their regular IRA Savings account.

How to get PenFed’s IRA Premier account

To get a PenFed IRA Premier account, you’ll need to be a member of the credit union. Joining is easy and only takes a few minutes. You may be eligible for membership based on your employer (such as the military) or by joining the Voices For America’s Troops or National Military Family Association for a one-time $17 fee.

As a part of the application process you’ll need to deposit at least $5 into a Share savings account. Once this is done, you can open up your IRA Premier account with a minimum deposit of at least $10,000.

The credit union will mail you a signature form to complete your account application, however you can still open new accounts online before completing this final check mark.

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

Overall review of PenFed’s banking products

When it comes to bank accounts, PenFed really shines in some areas and offers somewhat lackluster products in others. Specifically, we really like the high rates offered on their checking accounts and CD products, which are currently running near the top of the pack. The added advantage for people who are over age 59 ½ to withdraw money from the IRA CDs without paying a penalty as long as they keep at least $1,000 in the CD is also a great option.

However, other products — such as their savings and money market accounts — fall a bit short. We find it odd that they charge ATM fees for some of their accounts, even if you use a bona fide PenFed network ATM. Furthermore, each of PenFed’s savings accounts offers such low rates that we can’t really recommend them as a place to grow your money.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

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

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Best of, Reviews

The Top 7 Second Chance Bank Accounts

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Some banks don’t like giving second chances to customers who have less-than-stellar financial histories, especially since it could expose them to expensive risks. A record of bounced checks or debit card overdrafts could easily lock you out of the conveniences of modern banking.

Fortunately, banks also like making money, and some offer special “second chance” accounts that minimize their risk while allowing consumers to stay in the banking system. A second chance bank account gives customers with troubled records a fresh opportunity to demonstrate they can bank responsibly.

When it comes to a second chance account, fees are an unfortunate reality. But some accounts offer customers a better deal than others, and we’ve researched our database to find the second chance accounts with the most reasonable fee structures, while also factoring in whether they provide online and mobile banking, and how accessible accounts are throughout the country.

Account Name

Monthly Fee

Minimum to open

Availability

Chime$0$0Nationwide
Peoples Bank Cash Solutions Second Chance Checking$4.95 $30Nationwide
GoBank Checking Account$8.95, can be waived if you meet requirements$20Nationwide
Radius Essential Checking$0$10Nationwide
Wells Fargo Opportunity Checking and Savings Accounts$10, can be waived if you meet requirements$2539 states (plus Washington D.C.) that have a Wells Fargo location.
BBVA Easy Checking$13.95$25Nationwide, with the exception of Alaska and Hawaii
Woodforest National Bank Second Chance Checking$9.95 monthly maintenance fee if you use a direct deposit; $11.95 without a direct deposit$25Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia

Second chance account basics

With a second chance bank account, customers shut out of traditional bank accounts get the opportunity to win their way back into a bank’s good graces. Similar to credit bureaus, financial services company ChexSystems maintains records of consumers’ banking histories. Bounced checks, overdrawn accounts or instances of fraud can all end up on your ChexSystems record; if you accumulate enough black marks on ChexSystems, banks could deny your application to open a new account.

Because second chance accounts are meant for customers who have demonstrated bad banking behavior, some lack features of traditional accounts, such as overdraft protection. In the eyes of the bank, you represent too much of a risk for them to extend you such courtesies.

Nobody likes paying fees, and we generally advise consumers to avoid needless banking fees due to the many fee-free banking options available. But fees are the price you pay for access to banking when you have a poor record. Plus, the second chance accounts listed below give you access to online and mobile banking, which is always a plus.

The 7 best second chance bank accounts

1. Chime

Chime

Fintech app developer Chime is not a bank, however their online checking account product is open to everybody no matter how bad your record is with ChexSystems. Chime does not check on applicants with ChexSystems, plus they offer lots of non-traditional features to help you get your financial life back on track. Best of all is the fact that they charge no fees at all, and require neither a minimum opening deposit or a minimum balance.

Chime account features:

  • No opening balance or minimum balance requirements.
  • Set up direct deposit for your paycheck, and the funds from each pay period will be deposited as soon as the transaction is initiated, giving you access to your pay up to two days earlier than conventional checking accounts.
  • Automatic savings features to help you save in your connected Chime Savings account.
  • The app sends you daily bank account balance notifications, and sends transaction alerts every time you use your debit card.
  • You can disable the debit card from the app.
  • Send 15 fee-free “friend transfers” P2P payments each month.
  • Nominal 0.01% APY on all deposits.

Fees to watch out for:

  • Chime’s service is almost entirely fee-free: No monthly charges, no ACH transfer fees, no foreign transaction fees, and no ATM fees if you withdraw funds from MoneyPass or Visa Plus Alliance network ATMs.
  • If you make an ATM withdrawal outside of these networks, there is a $2.50 fee.
  • Overdrafts are not permitted, so there is never an overdraft fee.

LEARN MORE Secured

on Chime’s secure website

Member FDIC

2. Peoples Bank Cash Solutions Second Chance Checking

Peoples Bank Cash Solutions

This Texas-based bank offers a second chance bank account that is available nationwide, and so long as you don’t have a record of bank or checking fraud on your record, you should be approved for this account. You’ll need to deposit at least $30 before the bank activates your account and provides you with checks and a debit card.

Fees to watch out for:

  • $4.95 monthly maintenance fee
  • $27.50 overdraft fee
  • $27.50 nonsufficient funds fee
  • $3.95 printed statement fee (which can be avoided with electronic statements)
  • $2.00 ATM withdrawal fee at machines not owned by Peoples Bank
  • $25 stop payment fee
  • $20 account closure fee (if within 90 days of opening account)

LEARN MORE Secured

on Peoples Bank Cash Solutions’s secure website

Member FDIC

3. GoBank Checking Account

GoBank

A brand of Green Dot Bank, GoBank does not run a background check for new checking customers on ChexSystems, and it does not require a credit check. The account comes with a free debit card and fee-free access to a large network of ATMs, although be warned that out-of-network ATM withdrawals carry a $3 fee, on top of whatever the ATM operator charges. GoBank’s $8.95 monthly fee is high. However, this fee can be avoided with a monthly $500 direct deposit.

Account Features:

  • A free debit card
  • 24/7 mobile and online banking
  • Simple budgeting and spending tracker tools
  • Mobile check deposits

Fees to watch out for:

  • $2.95 sign-up fee, waived if you set up your account online
  • $8.95 monthly maintenance fee, waived each month your account receives payroll or government direct deposits totaling at least $500
  • Fees of up to $4.95 charged by retailers to make cash deposits
  • $3 out-of-network ATM withdrawal fee
  • $5 card replacement fee
  • Foreign transaction fee is 3% total transaction

LEARN MORE Secured

on GoBank’s secure website

Member FDIC

4. Radius Essential Checking

Radius Bank

Products from online bank Radius are available to customers nationwide, and accessibility is a strong point in its favor. This second chance bank account only requires customers to deposit $10 to open an Essential Checking account, which is lower than some other accounts on this list.

Account Features:

  • A free debit card
  • 24/7 mobile and online banking
  • Access to Radius’s budgeting and personal finance tracking apps
  • Eligibility to upgrade to Radius’s Reward Checking account after 12 months of positive banking history

Fees to watch out for:

  • $9 monthly maintenance fee
  • $25 per item non-sufficient funds fee (waived on all overdraft items $5 or less)
  • $5 daily overdraft fee

LEARN MORE Secured

on Radius Bank’s secure website

Member FDIC

5. Wells Fargo Opportunity Checking and Savings Accounts

Wells Fargo Bank

Wells Fargo’s Opportunity Checking and Savings Accounts are tailor-made for folks with a lackluster credit or banking history. With a $25 opening deposit, you’ll get access to a second chance bank account that offers most of the bells and whistles of a traditional bank account. The account does come with a monthly fee, although it’s possible to waive it if you meet a few requirements (see below).

Account features:

  • $25 minimum deposit to open
  • Free transfers are available between Opportunity Checking and Savings accounts
  • You can choose to opt into overdraft protection
  • Free access to bill pay
  • “My Spending Report with Budget Watch” is available if you want to pay extra attention to where your money is going
  • Free debit card with access to more than 13,000 Wells Fargo ATMs throughout the country

Fees to watch out for:

  • $10 monthly service fee, waived if any of the following are true:
    • You make 10 posted debit card purchases or payments
    • You keep a minimum daily balance of $1,500 in the account
    • You receive $500 total in direct deposits each statement cycle
  • $35 overdraft and returned item fee
  • $12.50 overdraft protection transfer fee
  • $15 fee for excess activity (exceeding withdrawals from your savings account)
  • 3% foreign transaction fee with your debit card
  • $5 for money orders
  • $31 for stop payments

LEARN MORE Secured

on Wells Fargo Bank’s secure website

Member FDIC

6. BBVA Easy Checking

BBVA
BBVA’s Easy Checking product is available as a second chance account to customers in the Lower 48 (sorry, residents of Alaska and Hawaii, you’ll have to look elsewhere). Note that you must open the account at one of the bank’s branch locations, or by phone outside of the branch network footprint; you cannot open this account via their website. There is a $13.95 monthly service charge to maintain the account. You can request that BBVA upgrade your account one of their regular checking products after 12 months — and ditch that high monthly fee — so long as the Easy Checking account remains active and has a positive balance.

BBVA Easy Checking features::

  • Online and mobile banking, customized alerts, and a free debit card (with option to personalize)
  • $25 minimum deposit to open
  • Free BBVA ATM withdrawals

Fees to watch out for:

  • $3 fee for out-of-network ATM withdrawals
  • $38 insufficient funds fee ($32 in California)
  • $15 deposit item returned fee
  • $32 stop payment fee made over the phone or in person ($30 in California); $25 if made online
  • No fee for closing your account within 180 days of opening

LEARN MORE Secured

on BBVA’s secure website

Member FDIC

7. Woodforest National Bank Second Chance Checking

Woodforest National Bank

This regional bank has a checking account aptly named Second Chance Checking, to help people rejected by other banks access — provided they live in one of the 17 states where a physical branch exists and can meet the $25 minimum opening deposit requirement. Those states are: Alabama, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, and West Virginia.

Fees to watch out for:

  • $9.95 monthly maintenance fee if you use a direct deposit (or $11.95 without a direct deposit), $3.00 monthly paper statement fee (which can be avoided if you sign up for electronic statements)
  • $9 one-time account set-up fee
  • $2.50 ATM withdrawal fee when used at a non-Woodforest network ATM
  • $15 debit card set-up fee
  • $29 overdraft fee (for each charge)

LEARN MORE Secured

on Woodforest National Bank’s secure website

Member FDIC

Alternatives to a second chance bank account

Get a prepaid debit card

Tired of the traditional banking experience? You could opt for a prepaid debit card instead. With a prepaid card, you can load money onto it and spend at merchants that accept major credit and debit cards. But if you try and spend more money than what’s on the card, the transaction is declined — although this prevents you from accruing any overdraft or insufficient funds fees. This is useful if you feel you may still have trouble managing your spending and need an extra layer of security to prevent you from getting into trouble.

Some prepaid cards offer extra perks like advance direct deposit and free ATMs so long as you stay in their network.

Open a secured credit card

You may also have better luck applying for a secured credit card if your credit score is in good enough shape. Usually, this requires depositing cash with the lender, who then gives you the credit card for the same amount. Each month that you make on-time payments, the bank will report that good behavior to the credit bureaus, helping you boost your credit score. At the end of the payment period (generally 12 months, though it varies by banks), you’ll get the full deposit back.

Secured cards can come with high interest rates and many don’t feature the enticing rewards other high-end cards do, but they get the basic job done for consumers who don’t need a card with a high credit limit.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at [email protected]

James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here

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Reviews, Strategies to Save

American Express® Personal Savings Account Review: A Solid Choice for Online Banking

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

American Express Personal Savings Account

This account is a great option for anyone who wants the flexibility of earning a high interest rate without the withdrawal restrictions that come with a CD.

APY (%)

1.90% Variable

Minimum Deposit Amount to Open Account

$0

Minimum Balance to Earn APY

$1

Permitted Monthly Withdrawals

6

Annual Fee

$0

FDIC Insured?

Yes

Mobile App?

No

Transfer Time

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® Personal Savings account, your money earns 1.90% variable APY. It’s currently one of the best rates you can earn from an online savings account. The account does not have a monthly fee and they don’t require a minimum deposit, which makes it an affordable account to open. You will have to fund your account within 60 days of applying, and the FDIC insures your deposits up to full legal limit.

How the American Express Personal Savings account works

The American Express savings account compounds daily at a variable 1.90% APY, and interest earned is credited to your account on your monthly cycle date. The rate is variable, so 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, as well as by sending a check.

What we like about the American Express Personal Savings account

  • High interest rate The 1.90% variable APY is better than what you would earn putting your money in the accounts most brick-and-mortar banks offer. While there are higher rates to be had, American Express has a good offer.
  • Automatic savings It’s easy to make saving automatic when you have an online savings account. With the American Express Personal Savings account, you can easily set up a recurring deposit to pull funds from an external savings or checking account. To make it even easier to resist touching your savings, you can even have a portion of your paycheck directly deposited to the account.
  • Discourages spending With your money in an online account like the American Express Personal Savings account, you can only get your cash after making a transfer to an external checking account to which you have debit card access. The inconvenience makes it that much more difficult to spend your savings.

What we don’t like about the American Express Personal Savings account

  • No ATM 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 ACH transfer from your online American Express Personal Savings account can be problematic in a pinch. (American Express says transfers will take one to three business days for funds to become available in your checking account.) If you’re worried about this, you can instead turn to an online bank like Synchrony Bank that makes it easier to access your savings by issuing an ATM card tied to your high yield savings account.
  • Variable interest rate The annual yield rate American Express is offering on this savings account is high at 1.90%, but the bank can change that rate at any time for any reason, as the rate is variable. If you’re looking for a more predictable rate of return, consider a certificate of deposit.
  • Limited withdrawals Because this is a high yield savings account, banks are limited by Federal Reserve Board Regulation D to a maximum of six withdrawals and/or transfers from your online savings account per statement cycle without penalty. With that in mind, before you decide how much you’ll put away each month, make sure it’s not more than you can afford to, so you aren’t repeatedly reaching into your savings.

How the American Express Personal Savings account compares

As indicated earlier, the American Express Personal Savings account offer is strong, but how does it compare to other savings accounts?

Institution
APY
Minimum Account Balance to Earn APY
American Express National Bank
High Yield Savings Account from American Express National Bank

1.90%

$1

LEARN MORE Secured

on American Express National Bank’s secure website

Partner Offer

Member FDIC

Synchrony Bank – 1.90% APY and no minimum balance

Institution
APY
Minimum Account Balance to Earn APY
Synchrony Bank
High Yield Savings from Synchrony Bank

1.90%

$0

LEARN MORE Secured

on Synchrony Bank’s secure website

Member FDIC

With $0 to open the account, you can earn an annual yield of 1.90% on savings account balances through Synchrony Bank and there are no monthly fees.

Savings accounts through Synchrony interest is compounded daily and is credited to the account monthly. An ATM card is offered through this account and you can still easily transfer or deposit funds through an ACH transaction or online.

Goldman Sachs Bank USA – 1.90% APY* and $0 minimum to open

Institution
APY
Minimum Account Balance to Earn APY
Goldman Sachs Bank USA
High-yield Online Savings Account from Goldman Sachs Bank USA

1.90%

$0

LEARN MORE Secured

on Goldman Sachs Bank USA’s secure website

Member FDIC


Goldman Sachs Bank USA currently offers an APY of 1.90% on their Marcus Online Savings Account. You don’t need to deposit a minimum amount to open the account, but you will need to have a minimum balance amount of $1* to earn the APY. Interest on the Marcus Savings Account starts accruing the business day you deposit funds into the account. Goldman Sachs Bank USA doesn’t apply any service charges to their savings accounts.

Barclays Bank – 1.90% APY and no minimum balance

Institution
APY
Minimum Account Balance to Earn APY
Barclays
Online Savings Account from Barclays

1.90%

$0

LEARN MORE Secured

on Barclays’s secure website

Member FDIC


With $0 to open the account, you can earn an annual yield of 1.90% on savings account balances through Barclays. While there are no monthly fees, an account that has a balance that is less than $1 for 180 days or more may be closed by Barclays. Savings accounts through Barlcays will start accruing interest the day your initial deposit posts to your account, and interest is compounded daily. While an ATM card is not offered through this account, you can easily transfer or deposit funds through an ACH transaction or online through your account.

American Express CD Rates

These CDs are great for those who don’t have a lot of money to deposit, but the rates are slightly lower than the best CD rates available.

Term

APY

6 months

0.40%

12 months

0.55%

18 months

1.90%

24 months

2.00%

36 months

2.05%

48 months

2.10%

60 months

2.15%

CDs from American Express do not come with 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. While the rates aren’t terribly low, they just don’t compare to most of the best CD rates currently available.

How CDs offered by American Express work

American Express offers terms spanning from 6 months to 5 years. Interested is credited on a monthly basis and compounds until it matures. You can choose to have the interest transferred out of the CD and into the American Express Personal Savings Account on a monthy 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 CDs 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 ten days. If you don’t tell American Express that you do not wish to renew your CD, they’ll automatically renew the CD with the same term unless they no longer offer 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 having a moment not only because of the rise in mobile banking among consumers, but also because they can simply offer consumers more benefits because they don’t have to worry about as many overhead expenses as brick-and-mortar banks. An August 2017 study by DepositAccounts.com, another subsidiary of LendingTree, shows the annual percentage yield internet banks offer on savings accounts is more than four times what brick-and-mortar banks or credit unions offer. The same analysis shows annual percentage yields on internet bank savings accounts have surged 29 percent since January 2016.

Simply put, the main benefit of putting your money in an online savings account is your money does more for you. To show this, DepositAccounts provided an example, based on the average APYs in those savings categories: If a saver were to put $100,000 in a savings account and leave it alone for 10 years, they 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, assuming a fixed APY.

Overall Review of the American Express Personal Savings Account and CDs

Overall, the American Express Personal Savings Account is a solid online savings option. The interest rate they offer is high and the features of the account are comparable to other online banks’ savings accounts. While there are certain aspects of the Personal Savings account that could use improvement, other online banks present the same obstacles. As was mentioned earlier, the American Express Personal Savings account is one of the best options available.

The CDs American Express offers, on the other hand, aren’t quite as good. The 6 and 12-month CDs are nowhere near the best rates offered by other online banks and the 18 – 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 this bank doesn’t require a minimum deposit to open an account or 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 with on of the CDs offered by American Express.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at [email protected]