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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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DETAILSINSTITUTIONAPYMINMAXPRODUCT
American Express Bank, FSB.0.80%--High Yield Savings Account
Start SavingSponsored Note: Member FDIC. No Fees And Competitive Rates.
American Express Bank, FSB.0.70%--24 Month CD
American Express Bank, FSB.0.60%--18 Month CD
American Express Bank, FSB.0.55%--12 Month CD
Accounts mentioned in this post. Rates as of April 23, 2014

American Express Bank's Internet Savings Accounts and CDs - Updated Review

POSTED ON BY

American Express Bank, FSB.

Update 11/24/2011: The High-Yield Savings Account rate has fallen to 0.90% APY.

It has been just over a year since American Express Bank launched its internet savings account and CDs. Since that time the rates have remained competitive. As of the morning of 7/14/2010, the savings account rate is 1.30% APY. The most competitive CD rate is 2.00% APY for the 2-year term. Also competitive are the 1-year CD (1.50% APY) and the 18-month CD (1.65% APY). Neither the savings account nor the CD has a minimum deposit requirement.

Savings Account Features

Readers have provided several favorable reports on the internet bank. Two features that have impressed readers are an easy account opening process and a fast ACH bank-to-bank transfer service. Here's an excerpt from a reader's review:

Easiest and fastest account opening I've ever experienced. The test deposits were in my linked account on August 20. After verification, my initial deposit was posted to the Amex account on August 21. Added two additional external accounts and those test deposits were posted the following day as well. Transfers are posted the next business day following the initial transfer request.

One reader reported that he initiated an ACH deposit on a Monday, and it was credited to his Amex account on that Monday and debited from his external account on Tuesday.

One minor downside to Amex external account verification is that they debit the two small test deposits. So if you're linking to a savings account, 2 out of your 6 allowed monthly withdrawals will be used.

The Amex savings account has several features that make for a good hub account including fast ACH transfers, easy linking process and a large maximum transfer allowance (up to $250K per day). However, it does have two downsides:

1) Links for ACH transfers are limited to 3. If you need to link to another bank, you would have to delete an existing link before you can add the new link.

2) Hold time is fairly long. According to the FAQ:

Funds from electronic deposits to your account that you have initiated through us will generally be available for withdrawal on the sixth business day after the deposit is initiated. Funds from electronic deposits to your account that you have initiated through a person other than us will generally be available for withdrawal on the day we receive the deposit.

Note, even though the funds may be on hold, interest is earned from the day they receive the deposit.

For more details about why a hub account is useful and the features that make for a good hub account, please refer to my post Best Internet Banks to Use as Your Hub Account.

Certificate of Deposit Features

Since my review from last year, the bank has added one nice feature that makes the CD opening less worrisome. The CD rate is now locked at the time you submit the online application. Here is what the FAQ states:

When a new CD application is submitted, the interest rate and Annual Percentage Yield (APY) that are provided to you when you submit your application are the rate and APY that you will receive, provided that: Your account is funded within 30 days after we approve your application.

One thing that has changed for the worst is the early withdrawal penalty. Last year I had reported that the penalties were just 3 months of interests for terms of 1-year and under, and 6 months of interest for terms of over 1-year. The latest disclosure now includes what it calls the Cost Recovery Value (CRV) which may increase the penalty to be more than just 3 or 6 months of interest.

For more details of the savings account and CDs, please refer to my June 2009 American Express Bank review.

American Express deposit accounts are FDIC insured under American Express Bank, FSB (FDIC Certificate # 35328). It's a sizable bank with $32.98 billion in assets and $13.6 billion in deposits.

The bank's ratings for safety and soundness are above average: 3½ stars (good) at BauerFinancial, 4 stars (sound) at Bankrate.com and an overall health score of 5 out of 5 at DepositAccounts.com (see our financial overview for American Express Bank). These ratings are based on 3/31/10 data except for Bankrate which is based on 12/31/09 data.

  Tags: CD rates, American Express Bank, FSB., savings account

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Comments
13 comments.
Comment #1 by Anonymous posted on
Anonymous
Hold is six *business* days (emphasis added). How is this suitable for a hub account?

AMEX still uses paper statements.

6
Comment #2 by Anonymous posted on
Anonymous
#1 is right.  Ken, you've lost touch here.

2
Comment #3 by Anonymous posted on
Anonymous
If your just using it to transfer small amounts to a couple RCA accounts to satisfy your monthly ACH, then it's a good hub. Who cares about the hold in that case?

1
Comment #4 by Anonymous posted on
Anonymous
 

#3 is correct whilst #2 is not, as well as being a tad rude to Ken who in conjunction with his tech guy has has created a great product here. Sometimes, we tend to forget that.

Ken is correct in terms of identifying on his site financial institutions that may be used as hubs. Clearly, such hubs will have some differences amongst themselves. Serious players in this game need to have 1) a primary hub for efficiently moving fairly substantial amounts of funds to/from other accounts, with alacrity, AND 2) another hub where speed does not really matter as much, but the purpose is to satisfy (possibly many) small-denomination requirements. And, this (secondary) hub is basically disposable. As #3 above said, for satisfying these small-denomination requirements, speed does not matter as much.

4
Comment #6 by Anonymous posted on
Anonymous
I just opened one of these and on the last page it says the rate will be locked and the term started upon receipt of funds.  Did not check the FAQ's to see if they had been updated.

1
Comment #7 by Anonymous posted on
Anonymous
I just opened one of the two-year CD's.  On the last (account confirmation) page of the application it states the rate will be locked and the term started upon receipt of funds.  Did not check the FAQ's to see if there was a conflict or if they had been updated.

1
Comment #9 by Anonymous posted on
Anonymous
I have an online savings account with Am. Exp.  The hold is an issue, since if I need the money, it takes over a week (six business days), until I can access it, plus the time to transfer it (ussually a day or two).  It is the biggest compliant I have with this bank. 

1
Comment #11 by Anonymous posted on
Anonymous
Everyone should understand the early-withdrawal risk that accompanies the CRV:

"The CRV estimates the interest cost that we would incur if we were to replace your early withdrawn or closed CD with another replacement CD."

This makes the early withdrawal penalty a function of the market interest rate.

1
Comment #12 by Anonymous posted on
Anonymous
lame . you have no lifes (:

1
Comment #13 by Anonymous posted on
Anonymous
^^^^ trueeee

1