Yesterday Synchrony Bank gave savers a Christmas present by raising its deposit rates. The High Yield Savings Account (HYS) rate increased 15 bps to 2.20% APY for all balances. Five CDs also had rate increases including the 12-month (2.75% APY) and the special 15-month (2.85% APY). The new APYs are shown in bold and are effective as of 12/26/2018. The previous APYs are noted inside parentheses.
- HYS - 2.20% (2.05%)
- 12 mo - 2.75% (2.65%)
- 15 mo - 2.85% (2.75%)
- 24 mo - 2.90% (2.80%)
- 36 mo - 2.90% (2.85%)
- 48 mo - 3.00% (2.95%)
Synchrony Bank High Yield Savings (HYS)
I had thought the internet banks would be waiting until after the holidays before they started to respond to last week’s Fed rate hike. I suppose Synchrony wants to get ahead of the competition. This savings account rate hike does move them ahead of many of the large, well-established internet banks like Ally, American Express and Goldman Sachs. However, Synchrony is still behind many of the smaller and newer internet banks.
You can see below how Synchrony HYS account’s recent rate history compares to the other internet banks around the time of the last two Fed rate hikes.
- Dec 25: Synchrony High Yield Savings: 2.20% APY
- Dec 20: American Express National Bank Personal Savings: 2.10% APY
- Dec 19: Federal Reserve Target Funds Rate: 2.25% to 2.50%
- Dec 13: FNBO Direct Online Savings: 2.15% APY
- Dec 5: MySavingsDirect MySavings: 2.40% APY
- Nov 15: Ally Bank Online Savings: 2.00% APY
- Nov 15: American Express National Bank Personal Savings: 2.00% APY
- Nov 14: MySavingsDirect MySavings: 2.35% APY
- Nov 14: Discover Bank Online Savings: 2.00% APY
- Nov 9: Capital One 360 Money Market: 2.00% APY, $10k+
- Nov 6: Synchrony High Yield Savings: 2.05% APY
- Oct 30: Barclays Online Savings: 2.05% APY
- Oct 26: Goldman Sachs Bank USA High-yield Savings: 2.05% APY
- Oct 19: FNBO Direct Online Savings: 2.00% APY
- Oct 11: Discover Bank Online Savings: 1.90% APY
- Oct 3: Discover Bank Online Savings: 1.85% APY
- Oct 2: Synchrony High Yield Savings: 1.90% APY
- Oct 12: Goldman Sachs Bank USA High-yield Savings: 1.95% APY
- Oct 5: Ally Bank Online Savings: 1.90% APY
- Sep 27: American Express National Bank Personal Savings: 1.90% APY
- Sep 27: Barclays Online Savings: 1.90% APY
- Sep 26: Federal Reserve Target Funds Rate: 2.00% to 2.25%
The HYS account has no minimum balance or monthly service fee. Synchrony Bank offers an ACH bank-to-bank transfer service that allows customers to link up to ten accounts at other banks. Once the link is established, the customer can initiate electronic deposits and withdrawals to and from those external bank accounts. According to an online chat session that I had today with a Synchrony CSR, customers can initiate ACH transfers at Synchrony Bank of up to $500k per day for incoming transfers and up to $250k per day for outgoing transfers.
ACH transfers are a little slow. A Synchrony FAQ shows incoming transfers that take three business days before the funds become available. According to the CSR, “Turn around time for ACH transfers is 3-4 business days when funds will be posted and available.” This appears inline with readers’ experiences. Readers have reported that it takes 3 to 5 days for the ACH transfers to complete.
Synchrony Bank CDs
Synchrony Bank’s shorter-term CDs had rate gains of 10 bps while the longer-term CDs had gains of only 5bps and the 60-month CD rate remained the same. This is inline with the compressed yield curve situation that we’ve been seeing in Treasuries and at banks.
Minimum deposit for the CD is $2,000. Synchrony’s CDs are also available as an IRA (Traditional and Roth) earning the same APYs, with the same funding requirements. The details of the current rates and the histories can be seen in the following table. For the full list of Synchrony CD and IRA CD rates, please refer to the CD rates section of our Synchrony Bank page.
|2.50%||$2k||-||Synchrony Bank||48 Month CD|
|2.45%||$2k||-||Synchrony Bank||24 Month CD|
|2.45%||$2k||-||Synchrony Bank||36 Month CD|
|2.40%||$2k||-||Synchrony Bank||15 Month CD|
|2.35%||$2k||-||Synchrony Bank||12 Month CD|
Synchrony CD Features
Synchrony’s FAQs describe several important features of the CDs. Below are a few FAQs on CDs that I thought would be worth mentioning:
One downside with Synchrony Bank’s 15-month CD as compared with its 12-month CD (besides the longer term) is an early withdrawal penalty (EWP) that is double in size (180 days rather than 90 days of interest). The full details of the EWPs are described in Synchrony’s FAQs:
Q: Is there an early withdrawal penalty for CDs?
An early withdrawal penalty may be assessed if you make a withdrawal prior to the CD maturity date, which is the last day of the CD term. The penalty is applied to the amount of principal withdrawn (no penalty on interest). The bank does not charge an early withdrawal penalty on a CD for the death of an account owner with proper verification.
- Terms of 12 months or less: 90 days of simple interest at the current rate.
- Terms of more than 12 months but less than 48 months: 180 days of simple interest at the current rate.
- Terms of 48 months or more: 365 days of simple interest at the current rate.
The EWP only impacts the principal. As described in the following FAQ, interest can be withdrawn at any time without penalty:
Q: Can I withdraw my interest from a CD?
Any amount of interest paid during the current term of the CD can be withdrawn at any time without penalty
Interest can be transferred internally to a Synchrony Bank Money Market or High Yield Savings Account, a registered external account, or sent by check to the account address we have on file.
You don’t have to wait until maturity to give instructions to Synchrony informing them of what to do with the funds at maturity. This is described in the following FAQ:
Q: If my CD matures on a day the bank is not open, can I still make changes to my CD?
Yes. You are given a 10-calendar day grace period, that starts on the day after the maturity date.
Even though you are given a 10-calendar day grace period that starts on the date of maturity, you may also give instructions any time prior to the date of maturity via online banking or by calling a banker at 1-866-226-5638.
This is a useful feature if there’s a chance that you’ll be busy during the grace period.
There’s one FAQ on the 15-day rate guarantee period that changed this year. This FAQ now reads as follows:
Q: Are there rate guarantees for CDs?
The Bank will give you the CD interest rate in effect on the day the CD was opened as long as we receive and process your opening deposit on or before 15 calendar days from the opening date. We will not go by the postmark date of a deposit. If we receive your deposit within the 15-day period and the current rate for your CD term is higher on the date we receive and process your deposit, the Bank will give you the higher rate. Your interest rate is locked for the term of your CD once we receive and process your deposit.
For IRA CDs, the bank will give you the interest rate in effect on the day the CD was opened as long as we receive and process your opening deposit on or before 60 calendar days from the opening date and you are actively participating in the account opening process. This means all appropriate paperwork must be completed and that funding or appropriate account funding documents must be provided.
The 15-day and 60-day rate guarantees do not apply to CD renewals, in which case your CD will receive the rate in effect on the renewal date.
The rate guarantee is important for those who may have opened one of the above standard CDs in the past week or two. According to this current FAQ, “[y]our interest rate is locked for the term of your CD once we receive and process your deposit.” So if you opened one of the above CDs last Tuesday, and Synchrony received and processed your deposit last week, you will not qualify for the new higher rate. However, if Synchrony received and processed your deposit today, you should receive the higher rate. Previously, the FAQ stated that “if the bank rates go up during the rate lock period, the Bank will give you the higher rate.”
Additional Services for Deposit Account Customers
Synchrony Bank provides deposit account holders with complimentary Identity Theft Resolution Services through CyberScout which can offer assistance if you are ever a victim of Identity Theft.
Synchrony Perks Program offers additional rewards based on account balance size and the length of time you’ve been a customer. Diamond level is reached with a $250k balance or 5 years of tenure. Some of the perks that Diamond customers receive include three free wire transfers per statement cycle, a dedicated customer service phone number and unlimited ATM reimbursements.
Headquartered in Draper, Utah, Synchrony Bank is an internet bank that offers its services and product line to U.S. citizens and “U.S. lawful permanent residents” who are 18 years or older, have a permanent U.S. residential address, and possess a valid Social Security number.
Synchrony Bank accounts can be opened online, but IRA and Trust accounts require paper forms. Funding an account can be done with an electronic funds transfer. This is done by providing Synchrony with the account number and routing/transit number of an external bank account. If Synchrony can’t automatically verify your external account, it’ll use a trial deposit system. Once the online application completes, Synchrony Bank will mail a welcome kit within 7 to 10 days. The welcome kit includes a signature card that must be signed and mailed back. In addition, the welcome kit includes a deposit slip. If you decide to fund the account with a check instead of an online transfer, a check must be mailed with the deposit slip.
The online application can accommodate up to four beneficiaries per account. Unlike some other financial institutions, Synchrony Bank does not require Social Security numbers for beneficiaries: only name, address, and date of birth are necessary to add a beneficiary. CSR suggested having all information and documentation for the applicant and any beneficiaries on hand, since the online application is time sensitive and will time out if there’s a long period of inactivity.
According to the CSR, there’s no hard credit inquiry that can ding your credit score. The CSR stated that they “only do soft inquiry to verify your identity."
Synchrony Bank has an overall health grade of “A" at DepositAccounts.com, with a Texas Ratio of 9.66% (excellent), based on September 30, 2018 data. In the past year, Synchrony Bank has increased its total non-brokered deposits by $6.35 billion, an excellent annual growth rate of 14.49%. Please refer to our financial overview of Synchrony Bank (FDIC Certificate # 27314) for more details.
Synchrony Bank can trace its origins to a brick-and-mortar institution, the Monogram Bank, USA, which was established in Ohio in 1988. From 1989 to 2014, the Bank moved its headquarters four times and re-branded five times, with the current name change occurring in June 2014. Prior to the name Synchrony Bank, the Bank was known as GE Capital Retail Bank, reflecting its tie to GE Capital, its parent company. In January 2013, GE Capital Retail Bank acquired the deposit base and online deposits business of MetLife Bank, N.A.
Currently, Synchrony Bank is the 30th largest bank in the country with assets in excess of $90.20 billion.
How the High Yield Savings Account Compares
When compared to the 211 Savings Accounts and 183 Money Market Accounts tracked by DepositAccounts.com that are available nationally and have no large minimum requirements or small maximum balances, eight savings accounts and five money market accounts have higher rates.
How the 12-Month CD Compares
When compared to 213 similar length-of-term CDs tracked by DepositAccounts.com which are available nationally and have minimum deposit requirements of $10k and under, 11 banks and three credit unions have a higher rate.
The above rates are accurate as of 12/26/2018.