New Online Savings Account and CDs at American Express Bank
Update 3/03/11: The savings account rate has fallen to 1.15% APY. Refer to the bottom of the post for the rate history.
On June 1st American Express launched its new online personal savings products which include a high-yield savings account and CDs. This savings account is different than the old Savings Accelerator which was connected to the One from American Express credit card. This new savings account is a standalone account with no credit card.
The interest rates are not too exciting, but they are fairly competitive. As of 6/15/09, the savings account rate is 2.00% APY. Their short-term CDs are not competitive with only a 1% APY for a 6-month term and a 2.00% APY for a 12-month term. The longer-term CDs are more competitive with a 2.50% APY 24-month CD, a 3.00% APY 36-month CD and a 3.40% APY 60-month CD. These rates are listed at the bank's CD page as of 6/15/09.
One nice feature is that both the savings account and CDs have no minimum balance requirements. Another nice feature is that both can be funded by electronic transfers (you can also fund by check).
I called their toll-free number at 1-800-446-6307, and I was pleased with their customer service. I was able to connect fast to a knowledgeable CSR. Below are some of the features of these accounts based on my conversation with the CSR, from their FAQ and from their Disclosure document:
Savings Account and CD Features:
- Apply online or by phone
- If you apply online, can fund with ACH transfer or by check
- If you apply by phone, can fund only by check (CSR)
- Trial deposits used to verify accounts in the linking process (FAQ)
- Up to 6 beneficiaries can be added (used to say revocable trusts) (FAQ)
- No minimum balance requirements and no monthly fees
- No hard credit inquiry. Just a soft inquiry (CSR)
Savings Account Features:
- 2.00% APY on all balances as of 6/15/09
- Allows up to 5 links to external accounts (CSR) Update 3/9/10: Reader reported being told the limit is now 3.
- Electronic transfers are limited to $250,000 per day (Disc)
- Typical limit of 6 withdrawals per month as required by regulation (Disc)
- Interest compounded daily and credited monthly (Disc)
- Interest begins to accrue on the business day the deposit is received (Disc)
Certificate of Deposit Features:
- Rate is fixed for initial term
- The rate is locked at the time you submit the application provided that the account is funded within 30 days (FAQ) (updated 7/14/10).
- Interest can be paid monthly or annually or at maturity for terms under one year
- Early withdrawal penalty equals 90 days of interest on amount withdrawn for terms 1-year and under. Penalty equals 180 days for terms over 1-year. Update 7/14/10: The penalty may be higher than 3/6 months due to the Cost Recovery Value (Disc)
- Grade period at maturity is 10 calendar days (Disc)
- At maturity, you can request an ACH transfer of the money to the linked account (CSR)
- At maturity, they accept instructions by phone (CSR)
These deposit accounts are FDIC insured under American Express Bank, FSB (FDIC Certificate # 35328). The bank has fair ratings for safety and soundness: 3½ stars (good) at BauerFinancial (based on 3/31/09 data) and 3 stars (performing) at Bankrate.com (based on 12/31/08 data).
Thanks to the reader who mentioned this new savings account in the Daily News & Deals Page.
For other high-yield savings accounts, please refer to my weekly rate summary.
Rate History:
- 03/03/11: 1.15% APY
- 03/04/10: 1.30% APY
- 12/17/09: 1.50% APY
- 10/27/09: 1.70% APY
- 08/13/09: 1.85% APY
- 08/07/09: 1.75% APY
- 07/23/09: 1.85% APY
- 06/15/09: 2.00% APY
There's a legal difference between an account in the name of your trust vs. a personal account with your trust as beneficiary. For some people, that difference matters.
I just opened an Account yesterday. We'll see how long it takes to do their Transfer.
Thnaks
I scheduled two transfers (push/pull)
They were for different amounts on the same day.
I pushed money from Alliant CU into Amex
I pulled money from Alliant CU into Amex.
Here are the results
Amex Pull from Alliant
Credits Amex Same Day 8/3
Debits AU Next Day 8/4
Alliant Push into Amex
Debits Alliant Same Day 8/3
Credits Amex 2-days 8/5 (still says in progress)
The only thing everyone should be aware of is that while the transfers are posted to your account the next day, the funds are not available for withdrawal for 6 business days. Not a big deal since they still earn interest, but something to keep in mind.
Had trouble with being automatically verified online, so asked phone customer service to expedite, and they did.
One note, ALL deposits are held for verification (5 biz days) except (pre-verified, ie., direct deposit) ACH's that originate from outside of AMEX.
So if you have an outside financial institution that will link to AMEX account/routing #, it will be received by AMEX Bank with immediate availability.
The 2.75% is still available on the website?
However bankrate.com now lists both as only 2 stars. Should I be concerned?
Account opening worked like a charm. Did anyone get hit with the first statement and federal taxes being withheld even if they selected no to backup withholding? I wrote to them just to make sure since someone said they made a mistake.
Other than that, it looks like this account is smooth.
Countrywide had really nice transfer system but reduced their fund hold times which started out long as well. This is the big problem with Amex. 6 days of non use is akin to a 6 day CD for 1.85% HOWEVER what if you put the money in and they lower the rate? So far the rate is still 1.85% though so it looks good so far.
ShoreDirect has a higher rate but the bank appears to be very unstable and Amex is a big recognizable name with excellent customer service so the Amex account seemed like the best choice. Heard problems with Discover when they had the 2%.