Barclays Online Savings Account Joins the 1% Club

Barclays increased the rate of its Online Savings Account today. The APY went up by 10 basis points to 1.00%. This applies to all balances. The savings account has no minimum balance requirements and no monthly service fees. In addition, Barclays raised the rate of its Dream Account by 10 basis points to 1.05%. This is a special type of savings account that’s designed to encourage regular deposits. The Dream Account has a maximum deposit of $1,000 per month. Thanks to DA member buckeye61 for reporting on this news in the DA forum.

It’s nice to see another internet savings account join the 1% club. This "club" has been slowly growing this year. However, in the last month, the growth has been picking up. GE Capital Bank joined the club last week, and Synchrony Bank joined it in November. Hopefully, this trend will continue into 2015.

Barclays started offering its Online Savings Account with a 1% APY in March 2012. The rate fell to 0.90% in May 2013, and that was the last rate cut.

In addition to maintaining competitive rates, Barclays Online Savings Account has some nice features including an ACH bank-to-bank transfer system. The ACH transfer limit for both deposits and withdrawals is $250,000. Like any savings account, there’s a limit of six withdrawals per month. There’s a $5 fee for additional withdrawals.

Barclays also has a history of competitive CD rates, especially on its longer terms. I have more details on the CDs in my last Barclays CD review.

Bank Overview

The Barclays internet bank is part of Barclays Bank Delaware which is a FDIC member (FDIC Certificate # 57203). The bank is best known in the U.S. for partnering with companies in offering co-branded credit cards. It's part of the U.S. division of Barclays, a British multinational megabank.

The internet bank has been growing quite a bit. In its first six months, Barclays reached $1 billion in deposits for its savings accounts and CDs. In the last year, Barclays has increased its total deposits by $3.61 billion, resulting in almost 32% growth for the year. With that kind of growth, it might seem surprising that the bank is raising its rates. However, loan growth has also been strong with total loans exceeding deposits by more than $4 billion. Barclays has a large credit card operation, and it’s using the internet bank as a source of funding.

Barclays Bank Delaware has an overall health grade at DepositAccounts.com of "A+" with a Texas ratio of 5.13% (excellent) based on September 30, 2014 data. Please refer to our financial overview of Barclays Bank Delaware for more details. The bank has been a FDIC member since 2001.