It didn’t take long for American Express National Bank to respond to yesterday’s Fed rate hike. The Bank raised its American Express Personal Savings account (Personal Savings) rate by 10 bps to 1.90% APY. This rate is effective as of 9/27/2018. We will likely see other online banks responding to yesterday’s Fed rate hike with their own rate increases in the coming weeks, and it shouldn’t be long before most of the big online banks break through 2% on their savings accounts.
|1.90%||$1||$5m||American Express National Bank||High Yield Savings Account|
As DA reader, buckeye61, noted in the DA Forum, “American Express National Bank inches ahead of Discover Bank and Capital One in the big Credit Card Banks rate competition.” A few new online banks and a few small online banks have higher rates on no-minimum savings accounts. Compared to large online banks, the 1.90% is in the high range, but that will likely not last long. In a few more weeks, 1.90% will probably be on the low end.
The list below shows the dates of the past three Personal Savings rate hikes and how they coincided with the Fed rate hikes. It shows what future rate hikes we may see in the next few months. It shouldn’t be long before the Personal Savings rate reaches 2%.
- Sep 27: Personal Savings: 1.90% APY
- Sep 26: Federal Reserve Target Funds Rate: 2.00% to 2.25%
- Aug 23: Personal Savings: 1.80% APY
- June 22: Personal Savings: 1.75% APY
- June 13: Federal Reserve Target Funds Rate: 1.75% to 2.00%
- June 7: Personal Savings: 1.65% APY
One interesting thing to note is that this current APY (1.90%) is a full percentage point higher than the rate American Express National Bank was offering on this account from January 2015 to May 2017 when it was stuck at 0.90% APY. On May 18, 2017, the APY finally started to rise.
Thanks to DA reader who emailed me this rate news, and thanks DA reader, buckeye61, for posting on this rate hike in the DA forum.
Personal Savings Account Rate History and Features
The American Express Personal Savings 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 2017 when the rate went up to 0.95%.
Even though there are several online banks offering yields of over 1.90%, it’s worth noting that American Express National 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 Personal Savings 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, their top-notch user interface and excellent customer service.
Below are a few of the relevant features that are mentioned in the bank’s FAQ section that are worth repeating. I also included three features that were based on my conversation with a CSR on April 5, 2018.
- No monthly service fees or minimum required balance..
- ”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)
- Wire transfers have a minimum amount of $500 per deposit or withdrawal (added to disclosure on 4-1-18)
- ”ATM cards, debit cards, or checks are not provided”
- Personal Savings “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.”
American Express National Bank is an internet-only bank that is headquartered in Salt Lake City, Utah. The Personal 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 National Bank, 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.
The bank has an overall health grade at DepositAccounts.com of “A” with a Texas ratio of 4.68% (excellent) based on June 30, 2018 data. Please refer to our financial overview of American Express National Bank for more details. The bank has been a FDIC member since 1989 (FDIC Certificate # 27471).
How the American Express Personal Savings Account Compares
When compared to the 220 Savings Accounts and 190 Money Market Accounts tracked by DepositAccounts.com that are available nationally and have no large minimum requirements or small maximum balances, nine savings accounts and no money market accounts have higher rates. When I posted on the American Express Personal Savings rate increase on August 24th, 13 savings accounts and four money market accounts had higher rates.
|Interest Rate||Account Name||Credit Union/Bank|
|2.25% APY||MySavings Account (no min)||MySavingsDirect|
|2.11% APY||High Yield Online Savings ($100 min to open)||Vio Bank|
|1.90% APY||American Express Personal Savings (no min)||American Express National Bank|
The above rates are accurate as of 9/27/2018.