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 (you may have heard of the Barclays Center though). 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.
50 million people around the world bank with Barclays.
One primary reason for this being that it is known for its impressive annual percentage yield (also known as the 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.
Types of Barclays 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. The bank also had Dream, which was a rewards savings account, but only remained active until October 2017.
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 20.40% APY for every one dollar deposit. Compared to other banks, this amount is about 12 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 0.35% APY but may change according to the bank’s regulations for new users. Meanwhile, the 60-month CD has a 3.10% 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 2.20%
- 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 of Opening an Account
The Barclays Online Savings Account comes with a few beneficial features to the users, including:
1. 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.
2. 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.
3. 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.
Cons of Opening an Account
As you can see, Barclays offers plenty of beneficial features. However, there are a few disadvantages to owning an account. Here are some of them:
1. 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.
2. Absence of Cash Deposits
There is no other way to add funds than to do it electronically.
3. No Withdrawals Allowed
Unless you have a linked account, you cannot withdraw cash through your online savings account.
4. 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.
Using Barclays Savings Account
As stated before since the bank is only available online, the way to deposit and withdraw money is to link the account to any bank. You can choose to link it with your savings or checking account as long as the other bank allows fund transfers electronically.
Another option is to deposit checks using an app on your smartphone or desktop. Most banks though limit check deposits. With Barclays, users will need the Deposit Checks feature, which enables them to upload a photo of the check. Whether the check is foreign, from a third party, or as a money order, you can deposit it to your Barclays account.
Here is a summary of the options:
Users are allowed to transfer funds to a linked bank account and from it up to six times for free every month.
Through mailing a check:
You can also mail your check directly to the company’s PO Box address in Illinois.
Through direct deposit:
By using Barclay’s routing number, which is 031101321, along with your account number to link with an external account. If there are any issues, customers can contact the company through the phone from Monday through Sunday. Customers are also welcome to send a letter to the company, which is addressed to a PO Box in Pennsylvania.
Barclays Savings Account vs. Other Options
One of the top alternatives to Barclays Online Savings account is from American Express National Bank. 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.