American Express is mostly known for its popular credit card business. However, did you know that the company also offers personal savings accounts?
American Express Personal Savings Account has been around for some time now.
Many people will instantly think about credit cards when American Express is mentioned, and they will be right. American Express does not advertise its banking operations as much as it does its credit cards.
American Express National Bank is the division of American Express that operates its banking service, the American Express Personal Savings Account.
Right now, the bank only offers two products — a high yield personal savings account and certificates of deposit (CD).
In this review, we will try to analyze these products and highlight their pros and cons.
What Is American Express National Bank?
American Express is a fairly ubiquitous name. The company has been a staple in the financial services industry since its founding in 1850 — offering charge cards, traveler’s checks, and credit cards.
However, after over 130 years of operating, in 1985, American Express decided to establish a banking division — the American Express National Bank.
Headquartered in Salt Lake City, UT, the American Express National Bank is an FDIC insured institution that conforms to all the government-mandated banking standards. It offers the same levels of encryption and fraud protection provided by any of the major banks.
Currently, the American Express National Bank only offers an online-only high yield savings account and a certificate of deposit (CD).
Both types of accounts are unconnected to the American Express Card products. They operate separately, requiring separate login details for the online portal.
Overview Of The American Express Personal Savings Account
The American Express Personal Savings account is an online-only savings account that offers an excellent APY — over twenty times the national average.
There are no monthly service fees and no minimum balance requirements for maintaining a savings account with the bank.
These are strong selling points because most bank — especially traditional brick and mortar banks — charge a monthly service fee and require a minimum balance.
Pros Of Getting An American Express Personal Savings Account
If you are on the fence about getting an American Express High Yield Savings account, maybe you should consider looking at the goodies they offer.
Below is a list of some of the strongest selling points for opening a savings account with American Express:
- High APY of 1.9% — over twenty times the national average of 0.09%.
- No monthly fees
- No account opening minimum
- The account earns interest daily, and the amount posted to your account monthly.
- Easily connect your current account with AMEX savings account
- No charge funds transfer
Cons Of Getting An American Express Personal Savings Account
While the American Express savins account offers some advantages, there are also some drawbacks, and we list them below.
- You do not get a debit card, ATM card, or checkbook with an AMEX savings account.
- No retail locations
- There’s no mobile check deposit.
- No current or money market account
Not getting a debit card along with your new online-only savings account is not uncommon. Most online-only banks do not give customers a debit card for their savings account.
Why Does American Express Bank Offer A High APY
American Express National Bank can offer an APY twenty times the national average because they don’t incur the overhead expenses associated with running physical locations.
Operating a physical location entails the payment of rent, the procurement of furniture, supplies, and equipment. It also means the hiring of staff, which can all be very expensive.
Since the bank saves money by not operating physical locations, it passes those savings on to the customers in the form of higher APYs.
Overview Of The American Express Certificate Of Deposit (CD)
American Express offers certificates of deposit, one of two products the bank offers — the other being the savings account previously discussed.
A Certificate of Deposit is a sensible option if you want to lock in a reasonable rate for your money. The CDs have different maturity terms — from six months to sixty months.
If you want to stash your money away for anywhere between six months to sixty months, a CD will be the best place to keep it. CDs generally pay a higher APY than savings accounts.
However, if you want the flexibility of accessing your money monthly, then the American Express High Yield Savings account will be a better option.
With the savings account, you can withdraw from your account up to six (6) times per statement cycle. Whereas, with CDs, there’s a penalty for making withdrawals.
Certificate of Deposit (CD) Terms and Conditions
America Express CD rates are fixed and become effective the day your application for the CD account is received.
However, you could lose your locked-in rates or incur a penalty if you do any of the following:
- If your account-opening deposit is not received within 30 days after your application is approved.
- Withdraw the interest earned on your CD before the maturity date.
- Withdraw the principal before the maturity date of the CD.
How To Open An American Express Account
The procedures are similar when opening an American Express CD or Savings account. The process is relatively simple and straightforward, and it can be completed in under ten minutes. You will need the following:
- Your SSN
- Date of birth
- Account and Routing numbers (for your external account).
- Email address
- Home address
- Phone number
Once you submit your application, you will receive an email indicating whether or not your application was approved. If approved, the next step is to fund your account using your connected external bank account or by mailing in a check.
Funds Availability
For the high yield savings account, funds are available for withdrawal the moment you fund your account. However, federal regulations allow just six withdrawals during the month.
For the certificate of deposit (CD), American Express imposes a penalty if you withdraw your money before the maturity date.
Related:
- Aspiration Bank Review: Everything You Need To Know Before You Open An Account
- Chime Bank Review: Everything You Need To Know Before You Open An Account
Conclusion
American Express Personal Savings account is an excellent option if you are looking for a free banking service with a high-interest rate. However, you may not be able to have easy access to your money as the account does not come equipped with a debit or ATM card.
The CD offers reasonable rates, but those rates are hardly the best on the market. Other financial institutions offer better CD rates.
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