American Express National Bank (had been named American Express Bank, FSB before April 1st) raised its American Express Personal Savings account (Personal Savings) by 10 bps to 1.55% APY. The previous Personal Savings rate hike was in late January when the rate also went up by 10 bps. The 1.55% APY applies to all balances. There are no monthly fees or minimums.
|1.55%||-||-||American Express National Bank||American Express Personal Savings|
The new Personal Savings rate isn’t high enough to be a rate leader, but it does position American Express to be in the mid-range of the big internet banks, and it should help to encourage other big internet banks like Ally and Discover to raise their rates. The big internet banks have been a little slow to hike their savings account rates following last month’s Fed rate hike.
New Deposit Account Agreement
With the new name came a new deposit account agreement with an effective date of April 1, 2018. Thanks to the DA reader, thowellIII, for his Forum post on this change. The most significant change is an increase to early withdrawal penalties (EWP) for new CDs or renewed CDs. Here’s a summary of the changes in days of interest:
- 12 months: EWP will be 270 days (was 90)
- More than 12, less than 48 months: EWP will be 270 days (was 180)
- 48 months, less than 60 months: EWP will be 365 days (was 180)
- 60 month or more: EWP will be 540 days (was 180)
Another change is relevant to the Personal Savings. Wire transfers now have a minimum amount of $500 per deposit or withdrawal. Wire transfers remain free for both incoming and outgoing transfers.
The above changes were the only changes that the CSR mentioned. I have not fully reviewed the agreement. If you see other changes, please leave a comment.
Personal Savings Account Rate History
For long-time American Express account holders, these recent rate increases may be a pleasant surprise. For the last several years, the American Express Personal Savings has been a little uncompetitive compared with other big internet banks. That started to change last May when it first increased the Personal Savings rate from 0.90% to 0.95%. After six 10-bps rate hikes since May, the Personal Savings is now competitive.
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%.
Personal Savings Account Features
Even though there are several internet banks offering yields of over 1.70%, it’s worth noting that American Express 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 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. I also included three features that were based on my conversation with a CSR on April 5, 2018. All of these are the same as I reported in January.
- ”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”
- 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.”
Thanks to DA reader, Maecl, for mentioning the rate hike in the DA forum.
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.
American Express National Bank is currently the 38th largest bank in the nation based on assets. It has total assets just over $59 billion, with over one million customer accounts. The bank has an overall health grade at DepositAccounts.com of “B+” with a Texas ratio of 5.31% (excellent) based on December 31, 2017 data. Please refer to our financial overview of American Express National Bank for more details. The bank has been a FDIC member since 2000 (FDIC Certificate # 35328).
How the American Express Personal Savings Account Compares
When compared to the 204 Savings Accounts and 176 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 four money market accounts have higher rates. When I posted on American Express Personal Savings rate increase in January, eight savings accounts and three money market accounts had higher rates. Below is a sample of these accounts with higher rates, showing how they compare with American Express National Bank.
|Interest Rate||Account Name||Credit Union/Bank|
|2.00% APY||Exclusive Savings - new account rate (no min)||Popular Direct|
|1.85% APY||eOne Savings - new money (no min)||Salem Five Direct|
|1.80% APY||Dollar Savings Account (no min)||DollarSavingsDirect|
|1.55% APY||American Express Personal Savings (no min)||American Express National Bank|
The above rates are accurate as of 4/5/2018.
To review 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 in the box at the top of the tables.