American Express National Bank raised its American Express Personal Savings account (Personal Savings) by 5 bps to 1.65% APY. This is the second 5-bps rate hike in the last two weeks. Since the March Fed rate hike, the Personal Saving account rate has risen a total of 20 bps. The 1.65% APY applies to all balances. There are no monthly fees or minimums.
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 size and the timing of the Personal Savings account rate hikes may be driven more by competition than by the Fed rate hikes. Big internet banks like CIT Bank, Goldman Sachs Bank USA and Synchrony Bank have recently raised the rates of their no-minimum savings and money market accounts to a range between 1.70% and 1.85% APY, and there are several small internet banks offering savings account rates as high as 2.05% APY.
Personal Savings Account Rate History
Since the March Fed rate hike, the Personal Saving account rate has risen a total of 20 bps. Since the June 2017 Fed rate hike, American Express National Bank has responded to Fed rate hikes in a pretty consistent fashion. Between the June and December Fed rate hikes, the Personal Savings account rate went up 30 bps in three rate hikes. Between the December and March Fed rate hikes, the savings account rate went up 20 bps in two rate hikes. If the expected Fed rate hike comes next week, this will be another case of the savings account rising 20 bps between Fed rate hikes.
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, 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.
- ”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.”
Thanks again 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 $57 billion, with over one million customer accounts. The bank has an overall health grade at DepositAccounts.com of “A” with a Texas ratio of 5.34% (excellent) based on March 31, 2018 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 # 27471).
How the American Express Personal Savings Account Compares
When compared to the 218 Savings Accounts and 185 Money Market Accounts tracked by DepositAccounts.com that are available nationally and have no large minimum requirements or small maximum balances, 11 savings accounts and six money market accounts have higher rates. When I posted on the American Express Personal Savings rate increase in May, 15 savings accounts and five 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|
|2.01% APY||eMoney Market - New Money Promo ($100 min to open)||Virtual Bank|
|1.85% APY||Money Market Account ($100 min to open)||CIT Bank|
|1.75% APY||High Yield Savings Account (no min)||Synchrony Bank|
|1.65% APY||American Express Personal Savings (no min)||American Express National Bank|
The above rates are accurate as of 6/7/2018.