Barclays is the second biggest bank in the world. But, despite being valued at $142.93 billion dollars, it’s still not that well known in the United States.
But several of their products are capturing the attention of consumers on this side of the pond.
And one of their best banking products is what we’ll be covering today in this Barclays Savings account review.
Barclays Bank Overview
Barclays is a London-based business that has been around for decades. Its roots can be traced all the way to the late 1600s.
Today, the company operates in all continents with the exception of Antarctica.
Its history in the US started in 2003 when the bank purchased Juniper Bank. The company rebranded it into a subsidiary with the headquarters situated in Delaware.
Over 50 million people around the world now bank with Barclays. One primary reason for this being that it is known for its impressive annual percentage yield (APY).
In fact, both the savings account and the certificates of deposit come with exceptional APY.
One of the most important and unique factors that potential customers should be aware of is that in the US, Barclays does not have any local branches.
The company caters to online depositors only. Therefore, it may be the perfect choice for you if you want an online bank.
Barclays Savings Accounts
As it stands, the majority of Americans only think of Barclays as a credit card company, as opposed to an actual bank.
However, the company also caters to consumer banking with its online savings account, as well as an online certificate of deposit (CD) account.
Since it is an online platform, customers can use their smartphone, laptop, or desktop to transfer funds. This way, if your current bank does not allow such transactions, you can still deposit to your Barclays account. This feature makes Barclays one of the best options for those searching for flexibility in remote check deposits.
Applicants who are still considered minors can also open an account with the bank. Those who are under 18 years old are allowed to deposit checks and perform other activities, such as viewing their account balances and activity. However, withdrawals are only applicable to the approval of an adult. The minor’s account works as a joint account with another person who is of legal age.
On the other hand, the CD account is linked to a feature that enables the creation of a CD ladder. It is a group of CDs whose maturity dates are spread. Such an arrangement is beneficial to the consumer because it gives faster access to funds in case of an emergency. Customers also have the ability to close a certain CD. Although it should be noted that there is a low-interest penalty. That said if you close a CD you do not have to lose interest on the entire balance of your CD account.
Barclays Online Savings Rates
Currently, the interest rate is set at 0.40% APY for every one dollar deposit. Compared to other banks, this amount is about 5 times more than the national average. However, this percentage can change anytime depending on the market interest rates.
Meanwhile, Barclays online CDs are available for various terms starting from three months to five years (or 60 months). It should be noted that the three-month term for the CD has a 0.10% APY but may change according to the bank’s regulations for new users.
Meanwhile, the 60-month CD has a 0.25% APY. The CD’s interest rates go up based on the length of the term.
It should be noted though that the CD rates are not the same as with a regular savings account. The latter can have an interest rate that can go up or down at any time. CD rates, on the other hand, will stay the same until maturity.
Barclay Savings Account Fees
Barclays savings account does not require a minimum deposit for new accounts. Customers also get to avoid maintenance fees, which traditionally cost money each month. There are also no fees for certain activities and requests.
Barclays charges little-to-no fees, which makes it a standout amongst most banks.
However, for anyone who closes a CD account early, specific fees may apply. Another benefit is that since you are not allowed to write checks using your account, you will not be charged with fees associated with due to insufficient funds.
But, despite not having maintenance or low balance fees, the online savings account is not entirely fee-free. Here is a look at the current fees that come with the account:
- Only six transactions can be performed within a statement cycle. If you go over this number, you will be charged $5 for each excessive transaction you do.
- Barclays charges $5 for cashier’s checks.
- There is a $0.50 charge each time you wish to receive your bank statement by post.
- If you want to receive any additional documentation as quickly as possible, the express mail fee is set to $15.
Both the online savings account and online CD options have high-interest rates. Some customers and critics believe that the rates easily offset the fees mentioned above.
Should You Open a Barclays Savings Account?
Before opening an account, it is necessary to look at its features. This Barclays savings account review looks into the pros and cons of having an account with the bank. Here is an overview of this type of account first:
- Variable APY but currently at 0.40%
- No monthly fees
- No minimum deposit required to open
- Daily compounding of interest
- Limited to six monthly transactions
With the highlights pointed out, it is time to look at the advantages and disadvantages of opening a Barclays savings account.
Pros and Cons
The Barclays Online Savings Account comes with a few beneficial features to the users, however, there are a few disadvantages to owning an account as well:
- High APY: APY pertains to the annual percentage yield, at the time of writing this account has 0.40%, which is higher than the current national average. APY differs from interest rate and is a bit trickier to compute. It is mainly the interest rate that compounds monthly for the rest of the year. In other words, it is the annual rate of return that includes the compounding interest over 12 months.
- Low-To-No Fees: One of the biggest advantages is that you do not have to pay any maintenance fee, which many banks charge you every month.
No deposit required: You do not need to add funds to open an account.
- Save More Money: Unlike other banks, you do not have to keep withdrawing money to avoid penalties on maximum balances. You can hold as much as you want, which allows you to maximize your saving capabilities.
- High Transaction Fee: While there are not a lot of fees with the online savings account, you will have to factor in the excessive transaction fee. You should only have six withdrawal transactions each month to avoid the charge. Most online accounts do implement such a fee. However, Barclays requires $5 for every transaction if you already went over the limit.
- Absence of Cash Deposits: There is no other way to add funds than to do it electronically.
- No Withdrawals Allowed: Unless you have a linked account, you cannot withdraw cash through your online savings account.
- Deposit Hold: If you make a deposit, the transaction will not immediately reflect on your account. It takes five business days before you can see it credited.
Open a Barclays Savings Account
Some of the requirements include being a US citizen with a residential address in the country. You should also have a valid bank account, a Social Security number, and a phone number.
If at this point you have decided that you qualify and want to open an account, the process is quick and simple.
If you have already opened an online savings account before, the process is generally the same.
- Go to the bank’s website.
- Click “open an account.”
- A secure window will open.**
- After filling out their form, you will be asked to select a deposit amount.
- The final step is to link your existing bank account with a Barclays account.
- Then, complete the signup process with the other required information.
**Here you will need to provide details about yourself, including your full name, date of birth, email and home address, and your Social Security number.
Is a Barclays Savings Account Best For You?
One of the top alternatives to Barclays Online Savings account is the American Express Personal Savings account. It has the same account offerings, including CDs. CIT Bank also has comparable offers, plus a money market that both AmEx and Barclays do not provide.
Unlike these two banks, Barclays lets users make online deposits. CIT Bank also requires a minimum deposit of $100 to open an account. AmEx with its Personal High Yield Savings has similar benefits but the APY is lower than Barclays.
All in all, this Barclays savings account review concludes that this online account has beneficial features.
It does lack certain facilities, namely deposit and withdrawal using cash. However, the account makes up for the absent feature through its competitive and hard-to-beat APY.