You never know when you’ll be faced with an emergency, and using a credit card to foot the bill could mean that you pay a two thousand dollar car repair bill for years. Many people turn to savings accounts to help them be ready for emergencies, meet their goals to travel, or own property. Because of interest, you end up with more money than you would’ve had otherwise by leaving your money in a drawer at home. One savings account you may have heard about is American Express, and it’s online-only with no physical bank to visit.
What You Need to Know about the American Express Personal Savings Account
Amex was founded in 1850 as an express mail business. It’s headquartered in New York City and offers numerous products and services. The most well-known are perhaps the American Express credit cards.
An Amex Personal Savings account is with the American Express National Bank and is FDIC-insured up to two hundred fifty thousand dollars.
What Options Do You Have?
When you hold an Amex savings account, you have several online options. For instance, access is online, and you can transfer money from virtually anywhere via your computer or smartphone.
If you want to deposit a check, you mail it to a Salt Lake City address. Ensure that the check is signed and in accordance with all rules so it gets deposited as soon as possible instead of sent back to you.
American Express Personal Savings Homepage Screenshot
Certificate of Deposit
A certificate of deposit, or CD, is a savings account that pays higher interest rates than traditional savings accounts. However, the cash is not as accessible. CDs mature after a fixed term such as six months, two years or five years. If you access your money before the CD matures, you will likely lose any interest accrued up to that date and perhaps even some of the principal.
You can open CD accounts at many types of banks, including Amex. Most CDs through Amex run for at least six months and for as long as 60 months, or five years. When your account is nearing maturity, Amex will notify you by email and/or postal mail 10 days before the maturity date. In many cases, it will automatically renew unless that same CD is no longer being offered or if you don’t want it to renew.
You will incur a penalty if you withdraw your principal early. You will probably lose some, if not all, of the interest you’ve built in the CD term and may lose some of your principal. That said, Amex may waive the penalty in cases where the accountholder was declared incompetent or died. For accounts opened after April 1, 2018, the penalties are:
The interest you earn on a monthly basis is deposited into your account and added to the principal, earning you even more money. If you’d like immediate access to the interest, you can instead have it:
No minimum deposit; shortest term is six months
Access To Your CD
Online, mobile or phone access
FDIC Insurance up to the maximum allowed by law
No transaction fees, but there are penalties if you choose to withdraw from a CD prior to maturity
Current Terms and Rate
Importance of a High-Yield Savings Account
A high-yield savings account should earn you more interest than a savings account at a physical bank. Online banks save money by not having physical infrastructures, and this is one way they pass on the savings to customers. Of course, one disadvantage of not having a traditional savings account is that you can’t drive down to an ATM and withdraw money (this can be an advantage for folks who need considerable distance from their money).
With the Amex high-yield account, you are limited to six withdrawals per statement cycle, which translates to six per month.
High-yield savings accounts tend to pay less in interest than longer-term CDs do. For example, the Amex high-yield interest rate as of this writing is 1.65 APY, while the rate for a 24-month CD is 2.3 APY. On the other hand, it is 0.4 for a six-month CD and 0.55 for a one-year CD. You’ll earn 2.70 APY with a 60-month CD.
There are no monthly fees for Amex personal savings, nor should you have to pay anything to close an account. You can open an account with zero—no initial deposit required. The FDIC insures your money up to two hundred fifty thousand dollars per account.
While there is no online live chat available, there is a telephone number you can call 24/7: 1-800-446-6307. Also use this number if you need to report unauthorized transfers. There’s also a fax number for general customer service: 1-800-542-0779. As of this writing, there doesn’t seem to be the ability to scan checks for deposit electronically like you can at some other online banks. Mailing the checks in seems to be the only way to go. There doesn’t seem to be an email address for customer service.
As for security features:
No minimum deposit to open and no minimum balance to maintain
Access To Your CD
Online, mobile via phone or electronic transfer
FDIC Insurance up to the maximum allowed by law ($250,000)
No transaction fees
Current Terms and Rate
So, since everything is online, how do you access your money? How can you end up holding cash in your hands?
A common method is to transfer your money to another bank account. For instance, if you want cash in hand, you would transfer the money to a local bank account. Once the transfer goes through, you head to the local bank to withdraw the money.
CD money can’t be withdrawn without incurring penalties. High-yield account money can be withdrawn up to six times a month online or via telephone. Online internal transfers, online external transfers and automatic transfers all count toward this limit. If you need money but don’t want a penalty, you can call the bank and request an official check via mail. It won’t count toward the six times.
You have 24/7 online access to your account. You can check it at all times, provided you do have some sort of way to check online.
To fund your high-yield account, you can either transfer money into it from another bank account or write a check to the Salt Lake City address. It can take a few days to do either. For example, to set up transfers, two small deposits are made into your external account to ensure it exists and that the information you entered was correct. Once this is done, you can proceed with transferring, but it can take a day or two, sometimes more, for the money to be added to your balance.
Is American Express Personal Savings Account right for you?
An American Express Personal Savings account could be right for you if:
American Express Bluebird
American Express Bluebird is an alternative to debit cards and checking accounts. It may be useful for people who don’t qualify for traditional banking or for those who need limits on their spending. No credit check is required. Benefits include:
How Can You Save Using an American Express Personal Savings Account?
If you’re looking to save for something such as retirement or even college, neither a high-yield account nor a CD with Amex (or any other institution) is likely to yield the results you want. However, a personal savings account is invaluable for a balanced financial portfolio. You want money that does more than just sit around, and any little bit it earns is better than nothing.
How Do You Apply for an American Express Personal Savings Account?
Applying is easy to do online. Navigate to the Amex savings website, and choose whether you’re applying for a CD or high-yield account. You’ll need to provide your name, Social Security number and date of birth, among other information. You can also save your application as you progress, so don’t worry if you get interrupted halfway through—just remember to save.
We used criteria such as interest rate, customer service, website interface and security to rate
American Express Personal Savings accounts on a scale of one to 10 (one as the lowest and 10 as the highest).
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So, there you have it, a pretty favorable review of American Express Personal Savings accounts. The high interest rate can make up for the other factors if maximizing your investment is your top priority. Do check interest rate comparison tools right before applying for your account to ensure the rate is still relatively high.