Advertiser Disclosure

Reviews, Student Loan ReFi

Review: LendKey Private Student Loan

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.

mortar board cash

Updated August 9, 2018

Most private student loans can’t compete with Federal loans when it comes to interest rates. Private loans are typically more expensive, especially if longer repayment periods are offered. (You’ll pay more in interest over the life of your loan.)

However, LendKey provides a different solution. It’s a marketplace that offers you a chance to browse private student loans offered by credit unions and community banks. These institutions usually have better interest rates than big banks. As another bonus, credit unions offer a more personalized banking experience, and tend to be more lenient when it comes to credit history.

If you’ve had a rough time finding a private student loan lender who will work with you, then you should give LendKey a shot.

How Does LendKey Work?

It’s important to understand that LendKey itself is not a lender. It’s a portal you can use to find a lender. Filling out one application (on LendKey’s website) enables you to view all the private loans you’re eligible for from community banks and credit unions that have partnered with LendKey.

Unfortunately, because there are hundreds of banks listed with LendKey, it’s impossible to say what the specifics of each loan are. On its website, LendKey says variable interest rates start as low as 4.68% – 9.79% APR (with autopay).

Eligibility Requirements

You must be a U.S. citizen or permanent resident to apply for a private student loan through LendKey. You must also be pursuing an undergraduate or graduate degree at an eligible school. You can check to see if your school is eligible in the first section of the application.

Be prepared to join a credit union or community bank if you choose to move forward with a loan offered. Most institutions require that you become a member during the application process. This is standard for credit unions and community banks that have specific membership requirements.

Application Process

The LendKey application process has three steps:

  1. Check your eligibility: You can fill in preliminary information to see if you’re eligible to apply for a loan.
  2. Apply for a loan: If you want to move forward with any loan option presented, you can do so in this step. This requires you to fill out personal information such as your Social Security number and identification information.
  3. Submit documents: LendKey requires you to submit proof of identity (photo ID, such as a Driver’s License), your school transcript, and other documents as needed.

Overall, the application process should take around 15 minutes or less to complete. LendKey will then review the information you’ve provided and give you a decision.

If your credit history isn’t the best (or isn’t very lengthy), you can apply with a cosigner. This gives you a better chance of getting the best interest rates possible on your private student loan. Some lenders affiliated with LendKey may actually require you to apply with a cosigner. Be aware that a hard credit inquiry will be used when you apply.

[What happens when a borrower defaults on a co-signed loan?]

The Fine Print

LendKey claims that there are no origination fees associated with any of the private loans offered by the credit unions or community banks it has partnered with. That doesn’t mean there aren’t any fees; late fees may still apply.

Additionally, a search for credit unions that use the LendKey application revealed one that does charge an origination fee. On The Great Lakes Credit Union page, a 2.5% fee is listed. It states there is an “upfront fee” which “is charged one time at loan disbursement.” As you can see on the page, “Powered by LendKey” is at the bottom.

We strongly recommend reading through the fine print of the organization you choose should you find a loan through LendKey. Don’t be afraid to ask about fees before signing anything.

The disclaimers are also nearly hidden at the bottom of LendKey’s site as you need to click on “Some Disclaimers” to review them.

Pros and Cons of LendKey

There are many advantages to applying for a loan through LendKey:

Pro: After paying back 10% of your loan principal, you’ll be eligible for a 1% interest rate reduction. This is only applicable to those who have entered full repayment status (after your grace period has ended).

Pro: You’re also eligible for a 0.25% interest rate deduction if you enroll in automatic payments. Most lenders offer this.

Pro: Most of the lenders that partner with LendKey don’t charge origination fees for private loans.

Pro: If you apply with a cosigner, a release is available after a certain amount of consecutive payments have been made. For most lenders, this period is between 24 to 48 months.

Pro: Most loans offered through LendKey seem to come with a 30-day return if you decide you don’t want to take the money. No fees or interest will be charged.

Pro: The application process is simple. Instead of having to shop around for loans individually, you have one company that will do it for you. This is much more convenient for you and takes less time.

Pro: LendKey has extensive customer service hours. You can call 888-549-9050 Monday through Friday from 9AM – 8PM ET.

There are several disadvantages to LendKey as well:

Con: You’re dealing with a number of different lenders, and it may be difficult to choose the best from a large list. You should do your own research on the banks LendKey matches you with.

Con: There are possible origination fees even though LendKey claims its lenders don’t charge upfront fees. You should call and confirm if you go with a loan that says its origination fee is 0%.

Con: Many of the individual lenders have loan pages that state the only options for repayment are interest-only or a minimum of $25 per month while in school. This means your loans are never in deferment, unlike Federal student loans.

Con: One large negative to consider with any private student loan is the lack of inherent benefits that come with them. Federal student loans give you more options when it comes to repayment plans and flexibility during tough financial times. It’s worth calling and asking if repayment assistance is offered before you go through with any of these loans.

Con: Some institutions may not offer fixed rates. Variable rates may be lower, but they’re subject to change, which can make it difficult to budget for your student loan payment in the future. Fixed rates offer stability as they’re locked in for the life of your loan.

LendKey

APPLY NOW Secured

on LendKey’s secure website

Other Private Student Loan Alternatives

Some states may not have as many private student loan choices as others. If you can’t find a loan that fits your needs, you may have to look elsewhere.

Citizen’s Bank: Variable APRs range from 6.14% to 11.19% for a 10-year term and 6.34% to 11.40% for a 15-year term. Fixed APRs range from 6.39% to 11.44% for a 10-year term and 6.59% to 11.65% for a 15-year term. You can choose to repay your loans on terms of 5, 10, or 15 years, and the maximum amount you can borrow is up to $90,000 for undergraduate, up to $150,000 for graduate, and up to $180,000 for business and law.

Citizens Bank (RI)

APPLY NOW Secured

on Citizens Bank (RI)’s secure website

SunTrust Custom Choice Loan: Fixed APRs range from 5.25% to 12% and variable APRs range from 4.25% to 11.30%. A 7 and 10 year repayment term is available, and if you borrow over $5,000, you can choose a 15-year term. The minimum amount required to borrow is $1,001 and the maximum amount is $65,000. SunTrust also offers a 1% reduction on your principal loan balance if you graduate with (at minimum) a Bachelor’s degree.

SunTrust Bank

APPLY NOW Secured

on SunTrust Bank’s secure website

It’s worth mentioning that you should exhaust your federal loan options before considering private student loans. Fill out the FAFSA and see how much you’re eligible for. Private student loans should only be used to bridge the gap if federal loans aren’t enough to cover your tuition.

Conclusion

LendKey is a great tool to use if you want to see what your local credit unions and community banks can offer you in terms of private student loans. There’s no application fee, but you should double check origination fees on any loan recommended to ensure you’re not left paying extra for a loan.

It’s also a good idea to shop around for private student loans as you want to get the best rates available. As long as you apply to multiple lenders within a 30-day period, the credit bureaus will count those inquiries as one inquiry. There’s no reason not to apply with more than one lender as one could offer you better rates, saving you thousands of dollars over the life of your loan.

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]

Disclaimer

Private Student Loan

Need a student loan?

Apply in as little as 3 minutes or less with College AVE.

earnest

Advertiser Disclosure

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

Advertiser Disclosure

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]