Barclays has started the new month by increasing its Online Savings Account rate to 1.85% APY.
Last June, the Online Savings rate was raised to 1.75% APY. Prior to the May rate hike (1.65% APY), the Online Savings was lagging slightly in the rates race. In January, Barclays had raised the rate twice, and after the second rate hike, the Online Savings at the high-end for online savings accounts; that 1.50% APY held steady until May.
In the past 15 months, there have been eight rate increases, adding a total of 85 bps. Before the rate began rising in May 2017, the Online Savings APY had remained at 1.00% since 2014.
Barclays now has reached the high-range for rates of the big internet banks offering no-minimum savings or money market accounts, including Synchrony (1.85% APY) and CIT Bank (1.85% APY). My definition now for mid-range is 1.75% and 1.80% APY. The big internet banks that now fall in this category include American Express National Bank (1.75% APY), FNBO Direct (1.75% APY), Discover (1.75% APY), Ally (1.75% APY) and Goldman Sachs Bank USA (1.80% APY). A few smaller internet banks are offering higher rates, as are some internet banks with accounts that have minimum balance requirements (PurePoint Financial at 1.90% APY for $10k+ and Northpointe Bank at 1.95% APY for $25k+).
Barclays’ Online Savings Account has several nice features, in addition to the no minimum balance requirement and no monthly fees, including,
- The funding account link is maintained for future transfers, eliminating the need to re-verify the account after it's opened.
- Up to three external account links per owner are allowed.
- Following account opening, ACH transfers are limited to $250k per transaction. If you have a larger amount to transfer, they can process the transfer, provided you call ahead.
- Maximum balance allowed per Social Security number is $5 million
- Up to four beneficiaries per account are allowed.
- While an account cannot be in the name of a trust, trusts can be named as a beneficiary.
Barclays Online CDs
In the past two months, Barclays has increased its Online CD APYs, but the rate hikes were too small to move the CDs close to the rate leaders. The 12-month Online CD added 5 bps today, giving it a 2.45% APY. The two most competitive Online CDs continue to be the 12-month and 60-month (3.00% APY).
|3.00%||-||-||Barclays||60 Month Online CD|
|2.45%||-||-||Barclays||12 Month Online CD|
One really nice feature of Barclays’ Online CDs is the mild Early Withdrawal Penalty: 90 days interest on terms up to and including 24-months, and 180 days interest for terms greater than 24 months. Please refer to this blog post for more CD details.
Thanks to the DA reader, buckeye61, for the Forum posts about Barclays’ latest rates increases.
Beneficiary Requirement Change
While I’ve mentioned this change before, it bears repeating: when designating beneficiaries, Social Security numbers are now required. When I reported on Barclays’ CDs some four years ago, Social Security numbers were not required for the beneficiaries. There is now a required field for a beneficiary’s Social Security number on the online banking page that allows account owners to designate and change beneficiaries.
Headquartered in Wilmington, Delaware, Barclays is an internet-only bank. As stated one Barclays’ “Terms and Conditions” page, “To open an account with us, 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.” Opening an account with Barclays, including CDs and Savings, must be done online.
The Barclays internet bank is part of Barclays Bank Delaware, which has been an FDIC member since 2001. Best known in the U.S. for partnering with companies in offering co-branded credit cards, Barclays is part of the U.S. division of Barclays PLC, a British multi-national megabank.
Barclays Bank Delaware has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 6.81% (excellent), based on March 31, 2018 data. In the past year, the Bank has increased its total non-brokered deposits by $2.49 billion, an excellent annual growth rate of 18%. Please refer to our financial overview of Barclays Bank Delaware (FDIC Certificate # 57203) for more details.
This past February, Barclays PLC made news when the U.K. Serious Fraud Office (SFO) filed charges against Barclays. According to a BBC article, the SFO charged “Barclays Bank PLC with 'unlawful financial assistance' related to billions of pounds raised from Qatar in 2008.” According to news reports in late May, these charges have been dropped. However, the charges could be reinstated if the SFO makes an application to a High Court Judge. Regarding the impact to the company if these charges are not dropped, the BBC article suggested this will have little impact to the bank’s operations. “Even if convicted there are banks (UBS, BNP, Credit Suisse) who have been convicted and continued operating.”
How the Online Savings Account Compares
When compared to the 220 nationally available Savings Accounts and 187 nationally available Money Market Accounts tracked by DepositAccounts.com that do not have large minimum balance requirements or small maximum balances, five savings accounts and two money market accounts currently have higher rates. My June 27 Barclays blog post reported that same placement, i.e., Barclays’ Online Savings APY is keeping pace. When I wrote about the Barclays rate increase in late May, nine savings accounts and four money market accounts had higher rates.
The above rates are accurate as of 8/1/2018.