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American Express Savings Account Review
American Express is best known for its financial services in relation to credit cards (they have over 102 million cards in force and approximately $888 billion worth of purchases are made annually on Amex cards). However, the company has been expanding over the past few years and they now offer a plethora of new services, such as the Bluebird account. Deemed ‘the checking and debit alternative,’ Bluebird has no fees (monthly, annual, overdraft, etc), offers several simple bill-paying options, and is easily accessible, both online and offline.
Of course, Bluebird is only the tip of the iceberg when it comes to services American Express now offers its customers.
What about savings accounts? American Express has also made a name for itself when it comes to savings, particularly in a day and age where interest rates at regular, brick and mortar banks are so close to zero they might as well be nonexistent. While there are downsides and certain hazards to exclusively-online banking, American Express savings accounts are a great addition (or alternative) to your current savings account holdings.
High Yield Savings Account
Wouldn’t it be nice to have a savings account that offered more than pennies per year in interest on your principle amount? Or even a savings account that doesn’t have a ‘monthly maintenance fee’ or slap on fees whenever you fall below the minimum deposit line? This is where the benefits of American Express high yield savings account outweighs the potential benefits of saving with a traditional banking institution. With 0.85% APY (nearly quadruple the national average rate), no minimum balance, no fees, 24/7 online or phone access to the account, and the fact you may make up to six withdrawals or transfers out of your High-Yield Savings account during a monthly statement cycle (See website for details), the American Express high yield savings account is one of the premiere savings accounts available today.
Certificate of Deposits (CDs)
American Express savings programs also include a variety of top notch certificates of deposit. The American Express CDs can be opened and managed online without ever visiting a physical branch location. CDs are protected by the FDIC up to $250,000 and there are no minimum deposit requirements or fees involved (only if you withdraw funds prior to CD maturation). The average APY ranges from 0.40% on a 6 month term to 1.10% on a 60 month term. The interest to be earned is significant: on a 36 month CD with a deposit of $10,000 and an APY of 0.90%, you will accumulate approximately $274 in interest once the CD matures.
Ease of Opening a New Account
American Express makes it easy to open a new savings account with them. When you go to the Application Page, you’ll find a simple, four step process. First, gather your information: Social Security number, address, e-mail address, date of birth, and your existing bank account and routing numbers (if funding electronically). Next, fill out the application and choose whether you want a high yield savings account or a CD. You can apply online or over the phone. Thirdly, you’ll receive a confirmation email and personal savings welcome kit in the mail. Finally, add funds electronically to your account (or send a check to American Express and have them deposit it into your account). You’ll even start accruing interest the first business day that you deposit the funds. It’s that easy.
Why American Express?
American Express may not dole out ATM cards for its personal savings customers, but the ease of account access over the phone (24/7 hotline) or online makes up for it. There is also the downside of not having a physical branch where you can speak directly to a banking representative, but if you don’t mind the lack of interpersonal interactions when it comes to your banking questions and concerns, American Express’ online savings accounts can suit your other needs. The interest rates are significantly higher than their brick and mortar competitors and the added benefit of no monthly fees and no minimum deposit make Amex savings accounts an attractive alternative to traditional savings accounts.
Saving with American Express isn’t for everyone. There is certainly some risk to handling your funds solely online, but American Express has set up the safety precautions to protect against cyber hackers. And since most other banks offer online banking to their customers, the threat of internet security dilemmas is not unique to online-only accounts such as American Express.
At a time where traditional banks are charging higher fees on savings accounts and paying paltry interest rates on the principle (often compounded monthly, not daily), American Express savings accounts are silver linings in an otherwise gloom banking industry. With interest rates that are often quadruple (or more) than their brick and mortar competitors, Amex is a viable alternative (or add-on, since you can tie your savings account to accounts you hold at other banks, if you so choose).