Since my American Express National Bank (American Express) blog post five days ago, the rate on its 60-month CD was lowered by 15 bps. The new 2.00% APY is still near the top for 5-year CDs offered by online banks.
|2.00%||$1||-||American Express National Bank||60 Month CD|
|1.85%||$1||-||American Express National Bank||12 Month CD|
What’s more interesting is that American Express has raised the rate on its 12-month CD to 1.85% APY. The addition of 130 bps has given the 12-month CD its highest APY since DA began tracking American Express CDs in 2009. The 12-month CD rate has been stuck at 0.55% APY since 2011; even through the last rising rate cycle, the 0.55% APY never budged. It’s a curious time to offer a competitive rate on a CD that’s been decidedly non-competitive for more than a decade, but it’s good to see.
American Express CDs can be opened with as little as $1, with no stated balance cap. According to the CD page,
For a Certificate of Deposit, your interest rate and Annual Percentage Yield (APY) will be fixed as of the date we receive your complete application, provided that:
- We receive your account-opening deposit no later than 30 days after we approve your application;
Interest is credited monthly and will automatically remain in the CD unless you request that the interest be:
- Transferred automatically each month from your CD account to your High Yield Savings Account;
- Transferred automatically each month to a linked account; or
- Mailed to you via check monthly, quarterly, or annually.
Early Withdrawal Penalty
American Express does not allow partial withdrawals from a CD: only an early closure is possible and is subject to a rather harsh Early Withdrawal Penalty:
For a CD with a Term of at least 12 Months but Less than 48 Months:
If you withdraw all of your principal balance or if the account is closed for any other reason before maturity, the penalty is 270 days’ interest on the withdrawn amount applying the interest rate disclosed in your account-opening documents.
Headquartered in Salt Lake City, Utah, American Express National Bank is currently the 24th largest bank in the country, with assets of nearly $121 billion and more than 6.6 million customer accounts. American Express offers its services and product line to U.S. citizens/resident aliens (18 years or older), who have a valid Social Security number or Tax ID number, and a U.S. residential address.
As American Express is a "pure" internet bank, opening an account can only be done online or by phone (800.446.6307).
According to the Getting Started page,
You can fund your online account, either by linking your current bank account or by mailing a check.
American Express also has a CD Account Questions page that provides answers to many of the commonly asked questions.
American Express National Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 5.15% (excellent) based on December 31, 2019 data. In the past year, American Express has increased its total non-brokered deposits by $9.1 billion, an excellent annual growth rate of 20.21%. Please refer to our financial overview of American Express National Bank (FDIC Certificate # 27471) for more details.
How the CD Compares
When compared to the similar length-of-term CDs tracked by DepositAccounts.com, which require a minimum deposit of $5k or less and are offered by online banks, American Express’ 12-month CD APY currently ranks third.
|Interest Rate||CD Length of Term||Online Bank|
|1.90% APY||12-Month CD ($500 min)||Prime Alliance Bank|
|1.86% APY||1-Year Term CD ($1k min)||CIT Bank|
|1.85% APY||12-Month CD ($1 min)||American Express National Bank|
The above rates are accurate as of 3/20/2020.
To review the best CD rates, both nationwide and state specific, please refer to our CD rates table.