For many years, savings account interest rates remained high. Rates dropped to unprecedented lows after the global economy crashed, though. Banks in the United States have yet to raise interest rates, despite a markedly improved economy. Therefore, consumers need to squeeze every last decimal out of their savings interest rates. Online banks tend to offer higher rates than traditional banks. American Express offers a high-yield online savings account right now that’s worth some consideration.
A Higher Rate Than Traditional Banks, But…
Millions of consumers bank with JPMorgan Chase, Bank of America, and Wells Fargo. They’ll receive an interest rate of 0.01% from these banks on savings accounts. Unfortunately, consumers often find themselves unable to grow their balances with such low rates. The American Express online savings account hits a 0.80% rate today. While that’s nowhere near pre-recession rates, it still beats traditional banks many times over. AMEX defeats brick and mortar financial institutions with ease.
…Slightly Lower Rates Than Competing Online Banks
Then again, other online banks sometimes have higher interest rates than AMEX. Synchrony Bank offers a one percent rate, and even GE Capital manages to offer 0.95% for savings accounts. A number of other online banks can best American Express at the interest rate game. Plus, many online banks offer even higher rates on larger account balances while AMEX doesn’t make such adjustments. Even a quarter percent difference matters over the course of multiple years.
Clean UI, Easy Transfers, and Accessible Statements
When it comes to general account features, American Express doesn’t disappoint its customers. Currently, its online savings account features a simple yet attractive user interface. Menu navigation often proves effortless, and users always know where to find account information or settings. Transfers to and from the account work smoothly without inducing headaches, too. Also, a user will find access to 12 months of statements in downloadable PDF form. Available features are handled well here.
No Monthly Fees, No Minimum Balance Requirement
With its savings account, AMEX gives owners the ability to truly control their finances without worry. Account owners aren’t charged a monthly maintenance fee or any fees at all. The account itself doesn’t come with minimum balance requirements, either. If an individual only has $1.00 to save, then that’s all they have to put into the account. By offering a no-fee, no balance requirement account, AMEX gives consumers more power and options than other banks, traditional or online.
No ATM Card And Certain Features Don’t Exist
Only a handful of online banks provide their customers an ATM card for withdrawals. American Express isn’t one of those financial institutions. On top of that, some common online banking features are non-existent with AMEX. A companion smartphone app isn’t available for this savings account. Users can’t add checks without mailing them to the company. For most consumers, such omissions aren’t a major issue, but plenty of serious savers want more bells and whistles with their accounts.
Interest Rate Has Slowly Been Dropping
As a final negative, the interest rate on this account has trended downwards over time. A 0.95% rate was available nearly three years ago. That rate then dropped to 0.89% and then 0.85%, until it hit the current offering of 0.80% months ago. In due time, rates will surely increase across most financial institutions. It’s still troubling to see that AMEX has dropped its rate as other banks have kept their own rates steady. Some banks have even increased their rates.
The Verdict
The American Express online savings account is easy to recommend over savings products offered by brick and mortar banks. On the other hand, certain aspects of the account are lacking compared to the online competition. A slight difference in rates and a couple of missing features make this option average at best. Most consumers won’t have a problem with the account and its features. In the end, individuals that are serious about savings might find the account lacking and desire something better.
