American Express Bank Ups Savings Account and Long-Term CD Rates

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Deal Summary: High Yield Savings Account (1.35% APY); no minimum balance. 5-Year CD (2.35% APY), no minimum deposit.

Availability: Nationwide (internet bank)

Another internet bank has increased its rates just a day after the Fed rate hike. American Express Bank, FSB raised the rates of its High Yield Savings Account (HYSA) and its long-term CDs. This brings back fond memories of 2005 and 2006 when it was common for internet banks to raise rates soon after Fed rate hikes.

First, let me review the HYSA. The savings account rate increased 10 bps to 1.35% APY. This applies to all balances. There are no monthly fees or minimums. The new HYSA rate isn’t high enough to be a rate leader, but it does position American Express to be on the high end of the big internet banks, and it should help to encourage other big internet banks like Ally and Synchrony to raise their rates.

APYMINMAXINSTITUTIONPRODUCTDETAILS
1.35%--American Express Bank, FSB.High Yield Savings Account
Accounts mentioned in this post. Rates as of January 20, 2018.

For American Express account holders, this rate increase may be an especially pleasant surprise. For the last several years, the American Express HYSA has been a little uncompetitive compared with other big internet banks. That started to change in May when it first increased the HYSA rate from 0.90% to 0.95%. After four 10-bps rate hikes since May, the HYSA is now very competitive.

The American Express Bank HYSA has a long history. I first wrote about it in 2009. During that time, the account has never been a rate leader, but it has always been respectable when compared with other internet banks. The lowest rate it has ever been was 0.75% for a couple of months in 2012. In early 2015, the rate had gone back up to 0.90% where it held until the middle of May when the rate went up to 0.95%.

Even though there are several internet banks offering yields of between 1.40% to 1.50%, it’s worth noting that American Express Bank has several features that give them an advantage over other internet banks. In fact, I seem to receive more positive opinions from readers about this bank than most other internet banks. In addition to not having monthly fees or minimum balance requirements, the HYSA has no dollar limitations for ACH bank-to-bank transfers. In addition, wire transfers are free. Readers have also commented about the bank’s fast ACH transfers and about their top-notch user interface.

Below are a few of the relevant features that are mentioned in the bank’s FAQ section that are worth repeating:

  • ”maximum total account balance is $5 million”
  • Two small test deposits are used to link external accounts
  • Maximum of 3 external accounts can be linked at a time (according to CSR)
  • For Pulling Funds from Your External Bank, ”On the day you initiate your transaction on the Personal Savings website, the funds will be reflected in your Current Balance and begin earning interest. [...] the funds will not appear in your Available Balance until the 5th business day after the deposit is initiated.”
  • For Pushing Funds to Your External Bank, “On the day you initiate your transaction on the Personal Savings site, the amount will be deducted from your Current and Available balance and the funds transfer will be initiated. The funds will generally be reflected at your bank in 1-3 business days.”
  • No dollar limits for ACH bank-to-bank transfers (according to CSR)
  • No wire transfer fees (according to CSR)
  • ”ATM cards, debit cards, or checks are not provided”
  • HYSA “may not be opened in the name of a trust, IRA, or business”
  • ”You may designate up to six (6) beneficiaries per account.”
  • ”Beneficiaries named on POD accounts must be individuals; POD accounts cannot be set up in the names of trusts.”

Thanks to the DA reader, Maecl, for mentioning the rate hike in the DA forum.

CD Rates

It has been a long time since we’ve seen competitive CD rates at American Express Bank. Today’s rate hikes move American Express Bank’s long-term CDs into competitive territory for internet banks. This is especially the case for the 5-year CD. The new 5-year rate (2.35% APY) isn’t the highest for internet banks, but it moves them close to the rate leaders.

APYMINMAXINSTITUTIONPRODUCTDETAILS
2.35%--American Express Bank, FSB.60 Month CD
2.00%--American Express Bank, FSB.48 Month CD
1.95%--American Express Bank, FSB.36 Month CD
1.75%--American Express Bank, FSB.24 Month CD
Accounts mentioned in this post. Rates as of January 20, 2018.

Like the HYSA, there is no minimum balance required to open a CD, avoid being charged a fee, or obtain the disclosed APY.

As stated in American Express Bank’s Truth In Savings Disclosure, the Early Withdrawal Penalty (EWP) reads as follows.

For a CD with a Term of More than 12 Months: If you withdraw all of your principal balance or if the account is closed for any other reason, the penalty is 180 days’ interest on the withdrawn amount applying the interest rate disclosed in your account-opening documents.

It’s nice to see another competitive 5-year CD with an EWP of only about 6 months’ interest.

Availability

American Express Bank, FSB is an internet-only bank that is headquartered in Salt Lake City, Utah. The High Yield Savings Account and CDs can be opened online or by phone. You can fund the account by either linking your current bank account or by mailing a check.

To open an account with American Express Bank, FSB, you must be at least 18 years old, a U.S. citizen or a resident alien with a valid Social Security number or other taxpayer identification number and have a residential address in the United States.

Bank Overview

American Express Bank, FSB is currently the 38th largest bank in the nation based on assets. It has total assets just under $52 billion, with over 900k customer accounts. The bank has an overall health grade at DepositAccounts.com of “A+” with a Texas ratio of 3.26% (excellent) based on September 30, 2017 data. Please refer to our financial overview of American Express Bank, FSB for more details. The bank has been a FDIC member since 2000 (FDIC Certificate # 35328).

How the Savings Account Compares

When compared to the 203 Savings Accounts and 178 Money Market Accounts tracked by DepositAccounts.com that are available nationally and have no large minimum requirements or small maximum balances, five savings accounts and one money market account have higher rates. When I posted on American Express HYSA rate increase in September, 11 savings accounts and 6 money market accounts had higher rates. As you can see, the HYSA has become more competitive. Below is a sample of these accounts with higher rates, showing how they compare with American Express Bank.

The above rates are accurate as of 12/14/2017.

To find the top Savings and Money Market rates, both nationwide and state specific, please refer to our Savings Account rates table and Money Market Account rates table. To find higher rates, raise the deposit amount at the top of the tables.

Related Pages: Salt Lake City savings accounts, savings accounts, 5-year CD rates, nationwide deals, Internet banks

Comments
Anonymous
Anonymous   |     |   Comment #1
But there is no way to communicate with them other than by phone. There is no secure email feature.
buckeye61
buckeye61   |     |   Comment #2
Good to see AMEX become a viable option among online Banks again. It has been a very long time since they offered a competitive CD rate, and their Savings rate is very competitive with the other LARGE online Banks(Ally, Discover, Capital One, Barclays & Synchrony).
Att
Att   |     |   Comment #3
I really don't care what rates" LARGE" online banks offer. You have better options with Dollar, Live Oak, Incredible Bank or Codorado that have rates 1.5% or better. I got out of AMEX a few years ago and they are still behind the leaders.
buckeye61
buckeye61   |     |   Comment #4
The more the "Large" online Banks raise their rates the higher the premium at the smaller online Banks your so in love with!! For others, that small premium in rates is not enough to motivate them to try smaller institutions like the ones you mention in your post. Nice to have choices!
Att
Att   |     |   Comment #5
AMEX has for a long time below the rate leaders. You also make a comment that I love a bank which is kind of a dumb statement.
. I choose to put my money where it will earn me the highest rate. You can choose to put your money where it earns less Intrest. Hey that's your choice!
buckeye61
buckeye61   |     |   Comment #6
I'm not a customer of AMEX.....I use to be a few years ago. My comments were directed to the blog, and how rate increases by the "Large" online banks lead to bigger increases at ALL online Banks(Including the ones you listed). I realize that many people only care about the highest possible yield on their savings....fair enough...but others look at other factors when choosing who they bank with.
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Availability: Nationwide (internet bank)

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Availability: Nationwide (internet bank)

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