Not all savings accounts are created equal and the American Express Personal Savings is a proof of that.
With an above average APY and little-to-no fees, it’s one of the best short term investments.
But, as with all financial products, the devil is in the details. So, let’s explore the particulars of this savings account and other Amex products to determine whether or not they’re a good fit for you.
American Express Savings Account
Established in 1856, American Express has grown into a world-leader a leader of credit cards, traveler’s checks, and charge cards. But it’s their lesser known American Express savings account we’ll be highlighting today. And turns out there’s a lot worthy of highlight. So, what are the pro’s and con’s of a savings account with them?
- Access to user-friendly My Personal Favorite interface
- No balance threshold or capping on minimum deposit
- The account is FDIC insured (to the tune of $250,000)
- Easy to automate savings
- Opportunity to convert funds to high-yielding CDs
- No transaction or monthly maintenance fees
- Easy access to funds through phone, online, and electronic transfers
- No checking or money market accounts (MMAs)
- Limited CD options
- Savings account does not come with ATM card, thus limiting withdrawals
- Account could do with an enhanced mobile app and live chat service
American Express High-Yield Savings Account
Better to keep your money in a savings account–or invested using the best investing apps–versus storing it in a safe. Why? It boils down to interest.
Lets say you have $5,000 tucked away in your house. You’re likely losing out the interest that would accrue gradually from a savings.
Amex offers an attractive 2.1% (APY). The national average is at only 0.09% APY.
If you were to put that $5,000 into this high-yield savings account–locked at 2.10% APY–you’d have $5,322 in three years. And that same amount of money invested at 2.80% could earn you up to $420 in interest.
Note: To be in a position to earn the attractive Annual Percentage Yield offered by Amerix, your account balance must have at least $1 or more savings.
You can ensure steady interest earnings on your personal savings account by setting up a recurring money transfer from your current bank accounts. The competitively appraised American Express savings account is similar to other visible savings accounts in the US money markets.
First, the savings account earns interest on a daily basis. The accrued interest is posted directly to your savings account each month. Secondly, the account allows you to keep your liquid assets in a protected environment where you get to transact business remotely and earn interest.
As an Amex online savings account holder, you will also have the opportunity to freely manage your funds. When you visit the personal savings account portal, you can easily calculate your savings potential using the tools provided.
Personal savings account holders are allowed to make up to 6 withdrawals a month as stipulated by the federal laws under the 12 CFR 20, Regulation D. However, deposits can be made at any time as no restrictions apply. Each depositor is also insured for $250,000 by the FDIC. You can access your account on 24/7 by going online or by phone.
The bank charges $0 in maintenance fees because online processes have fewer overheads compared to conventional banking arrangements.
The Amex savings account does not support investment and retail banking tools like the IRA, trusts, and business accounts. Instead, the no-promotion savings account is restricted to personal, family, and household purposes.
The account can only be opened and operated by the account holder. Once the account is operational, you may decide to replace the name or title with that of a revocable living trust.
The American Express personal savings account is not in any way connected to the card products offered by the same financial institution. Even the login credentials for American Express Cards are different from those of a savings account from the same bank.
To conform with the strict privacy provisions of the industry, American Express does not share transactions, balances, or personal information between Amex personal savings accounts and Amex cards. However, you can go to your online credit card portal and pay bills using funds pulled from your high-yield savings account.
American Express CD Accounts
This money-saving opportunity is ideal for individuals looking for attractive instruments to invest in the long-term. This type of situation can occur when you have extra cash that you do not intend to spend immediately but want to invest seriously.
You can also choose CDs if you want to spend your money on a select date in the near future (case in point is a plan to pay your kid’s college tuition in exactly 18 or 19 months).
To reap maximum interest, you can put the tuition money in an 18-month CD and withdraw the funds with interest once the account matures. A quick market analysis indicates that Certificates of Deposit generally attract higher interest compared to personal savings accounts.
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The above scenario is more applicable when it comes to long-term CDs with terms of 2 years or more. In spite of these benefits, it is always advisable to search for the best interest rates before investing your hard earned money. The CDs offered by American Express promise high interest with rates standing at 0.4% to 2.35%.
The CD terms run from 6 – 12 months or longer depending on the market situation. As of May 2019, the 36-month Certificate of Deposit APY is at 2.80%. Back in April 2018, the APY on the 60 month CD yields stood at an impressive high of 3.10%. Here are interest days to expect from Certificate of Deposits offered by American Express:
- 12 months or less: interest payments spanning 90 days
- 12 months to less than 48 months: interest payments covering 120 days
- 48 months: interest payments covering 365 days
- 60 months: interest payments covering 540 days
The bank has made it easy for account holders to set up CD accounts using their savings accounts. This feature means you can open and operate both an Amex CD and an Amex savings account at the same time. However, the process of funding a CD account is quite different from that of funding a savings account.
The savings on CDs are fixed so you can’t add funds once the account is locked. Unlike other banking institutions, American Express does not advertise rate guarantees on the shorter CD terms (10 – 20 days). This policy is largely due to short-term rate changes that may erode confidence. The bank usually submits interests accrued on CDs on a monthly basis.
If you want to access the interest earned on your CD, simply call a bank representative and request payment. Payments are usually sent as checks and bank transfers to the linked accounts.
Depending on the arrangement, you can ask the bank to send you a check by mail on an annual, quarterly, or monthly basis. It is good to know that the money is FDIC insured, which means even if the bank were to fail, you would still get your funds back.
The interest rates charged on CDs by American Express compare quite favorably with those offered by leading online banks with investment and personal savings accounts like Ally and Discover.
If, for any reason, you are unable to maintain your CD investment for a full term, consider investing in short term CDs or a high-yield savings account.
You can maximize your CD interest-earning potential using popular strategies like CD ladders.
This multi-faceted approach entails buying multiple CDs with different terms. When your savings mature, the withdrawals will also be staggered in intervals.
For instance, you can save $2000 in three different yield terms of six months, 18 months, and 24 months instead of putting the entire $6000 on a 24-month fixed CD. The success of the CD ladder strategy is greatly dependent on the amount of money you want to invest and the relevant waiting times.
Investors who pull their money out of CDs before the full term or maturity period are liable to pay penalties.
To avoid penalties and potential losses of savings, leave the principal fund intact, and only withdraw the money accrued as interest. You may also consider investing in liquid CDs that work like non-binding savings accounts.
This type of instrument allows investors to pull the money away from a CD risk-free before maturity.
Most financial institutions offering CDs have a minimum penalty amount. Here is what to expect from long-term and short-term Certificate of Deposits from Amex:
If you decide to close this type of account or withdraw the principal balance before maturity, a penalty amounting to 180 days interest will be assessed on the withdrawal. Interest is charged based on the opening rate.
If you choose to withdraw the principal balance on this short-term CD, you can expect penalties amounting to 90 days interest on the withdrawal. Like long-term CDs, the interest charges applied are those signed in the account opening statements.
Opening Amex Accounts
The process for opening an AMEX Online Personal Savings is simple. You’ll need the run of the mill information, like your date of birth and contact details, then submit your application for approval. Upon approval, you’ll be ready to make your deposit.
The minimum is just $1 for this account.
Gather Your Documents
Get all the necessary documents needed to open an account. The documents needed for this purpose are your social security number, phone number, date of birth, and contact details. The contact information required will include your physical address, email, existing bank account, and routing transfer information.
Submit Your Application
Before your application gets submitted, you’ll have to select the account type you wish to open. The submission can be initiated online or by phone. The dedicated phone number for submission is 1-800-446-6307. If you want to send by mail, address your application letter to the American Express National Bank at Post Office Box 30384, in Salt Lake City, UT Zip Code 84130.
Get Account Confirmation
You’ll be notified once your account is approved. Expect this notification either via email. AMEX account holder are also issued detailed savings kits. These are often mailed to you, but can be sent electronically too. However, they will not send you an ATM card. Because debit cards are reserved for money market accounts.
Make Your Opening Deposit
The next step after getting approval is depositing funds into your online savings account. You can easily make a deposit by sending a check via mail or linking your account with a funding, current bank account.
Money from internal and external current accounts can also be pulled to your savings account through safe electronic transfers and wire transfers. Sending money from an account held by a different bank may take 1 to 3 business days to complete.
The ability to link your savings account with a current account may eliminate the need to switch banks. Account holders can link up to three different current accounts using the routing and account numbers.
The deposit on your savings account must be received within 60 days of getting the approval while the funds for a Certificate of Deposit should be submitted within a 30-day window.
Using Your Account
In spite of constant fluctuations, the largely-irresistible interest rates offered by American Express remain a huge draw to those interested in opening personal savings accounts. This point is especially true when you consider the rates charged by leading players in the industry. Amex offers a high interest rate of 2.10% APY, which is sufficient reason to quit most of the brick-and-mortar financial institutions that offer zero to minimal interest on long term saving instruments.
Using your online savings account, you can easily log into your account and track interest and savings.
Having an automated online savings account also makes it easy to create a recurring deposit funnel that draws funds from a checking account or other external funding sources.
Savings accounts, by default, discourage spending while promoting a certain measure of frugality. If you want to get access to your savings, you must transfer the funds to an external current account linked to a debit card. This lengthy inconvenience may actually discourage spending.
The online savings accounts offered by Amex also benefit from a secure and user-friendly platform for managing money transfers, withdrawals, and deposits. To protect your information, this bank will request an existing username and password when logging into your savings account. American Express will then send you a one time 6-digit code.
The security code is normally sent via text message, phone call, or email.
Amex Customer Support
Making the conscious decision to save and invest your money wisely is the first step to securing financial independence and building long-term wealth.
American Express is committed to helping its customers achieve this overarching aspiration. In this regard, the American Express online bank offers unparalleled, 24-hour customer service support.
If you want to learn more about American Express offerings such as personal savings accounts and Certificates of Deposit, card agreements, service member benefits, and financial education, simply visit the company’s website.
A team of personal savings representatives is always on hand to receive your calls and direct your queries.
Account holders can also access their account online at their convenience.
Below are services you can perform independently online:
- Getting login instructions
- Opening a dispute
- Applying for free credit score check
- Ordering traveling checks
- Checking all personal cards issued to you
- Replacing or confirming your cards
- Opening an online account
American Express Personal Savings Summary
One of the most important things you can do when opening a savings account is comparing the interest rates offered by the issuing firms. Higher interest rates mean higher returns over the long term and, ultimately, more money on your pocket.
The American Express personal savings account is highly suitable for individuals looking for standalone savings or Certificate of Deposit accounts. In our assessment, these investment opportunities from Amex are exactly what the market has been yearning for in the push to promote individual savings.
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Aside from its competitive APY and online money management tools, American Express is a trusted name in the multi-trillion dollar global banking industry.
On the flip side, the personal savings account by Amex is not accompanied by ATM card or mobile deposit services. This limitation can be a problem when you want to access funds through alternative avenues.
Also, when you save your money with your American Express savings account or Certificate of Deposit, do not expect full suite account services such as those which are offered by traditional, brick-and-mortar banks.
Savings accounts generally have limited withdrawals due to the Federal Reserve Board regulation that caps withdrawals or money transfers to six per statement cycle.
If you go overboard on withdrawals, you are likely to attract penalties that can easily be avoided. Overall, the American Express online bank scores highly on core banking parameters like ease of use, fees and charges, financial tools, resources, and products and services.