Yesterday, American Express Bank, FSB increased the APY of its High Yield Savings Account (HYSA) by 10 bps to 1.15%. It has been about a month since the last rate hike when the HYSA APY increased from 0.95% to 1.05%. This new rate hike positions the HYSA on par with savings accounts at other big internet banks including Ally, Synchrony and Barclays. Anytime one of the big internet banks increases its savings or money market account rate, it’s newsworthy. It’s a sign of rising interest rates and increased competition that will hopefully lead to more rate hikes.
The American Express Bank HYSA has a long history. I first wrote about it in 2009. During that time, the account has never been a rate leader, but it has always been fairly competitive. The lowest rate it has ever been was 0.75% for a couple of months in 2012. In early 2015, the rate had gone back up to 0.90% where it held until the middle of May when the rate went up to 0.95%. In middle of June it went up to 1.05%.
Now that we’re seeing internet banks increasing their savings account rates to 1.35% and 1.40%, a savings account rate of 1.15% may sound disappointing. It’s worth noting that American Express Bank has several features that give them an advantage over other internet banks. In fact, I seem to receive more positive opinions from readers about this bank than most other internet banks. In addition to not having monthly fees or minimum balance requirements, the HYSA has no dollar limitations for ACH bank-to-bank transfers and free wire transfers. Readers have also commented about the bank’s fast ACH transfers and about their top-notch user interface.
Below are a few of the relevant features that are mentioned in the bank’s FAQ section:
- ”maximum total account balance is $5 million”
- Two small test deposits are used to link external accounts
- Maximum of 3 external accounts can be linked at a time (according to CSR)
- For Pulling Funds from Your External Bank, ”On the day you initiate your transaction on the Personal Savings website, the funds will be reflected in your Current Balance and begin earning interest. [...] the funds will not appear in your Available Balance until the 5th business day after the deposit is initiated.”
- For Pushing Funds to Your External Bank, “On the day you initiate your transaction on the Personal Savings site, the amount will be deducted from your Current and Available balance and the funds transfer will be initiated. The funds will generally be reflected at your bank in 1-3 business days.”
- No dollar limits for ACH bank-to-bank transfers (according to CSR)
- No wire transfer fees (according to CSR)
- ”ATM cards, debit cards, or checks are not provided”
- HYSA “may not be opened in the name of a trust, IRA, or business”
- ”You may designate up to six (6) beneficiaries per account.”
- ”Beneficiaries named on POD accounts must be individuals; POD accounts cannot be set up in the names of trusts.”
Thanks to the DA reader, buckeye61, for mentioning the rate hike in the DA forum.
American Express Bank, FSB is an internet-only bank that is headquartered in Salt Lake City, Utah. The High Yield Savings Account and CDs can be opened online or by phone. You can fund the account by either linking your current bank account or by mailing a check.
To open an account with American Express Bank, FSB, you must be at least 18 years old, a U.S. citizen or a resident alien with a valid Social Security number or other taxpayer identification number and have a residential address in the United States.
American Express Bank, FSB is currently the 38th largest bank in the nation based on assets. It has total assets in excess of $51 billion, with over 835k customer accounts. The bank has an overall health grade at EpBooks.us of “A” with a Texas ratio of 3.28% (excellent) based on March 31, 2017 data. Please refer to our financial overview of American Express Bank, FSB for more details. The bank has been a FDIC member since 2000 (FDIC Certificate # 35328).
How the Savings Account Compares
When compared to the 208 Savings Accounts tracked by EpBooks.us that are available nationally and have minimum balance requirements of under $500, 9 savings accounts have higher rates. Below is a sample of these, showing how they compare with American Express Bank.
The above rates are accurate as of 7/14/2017.