American Express is best known for its award winning credit cards. I’ve carried an Amex card for years and enjoy the excellent travel benefits it offers. What many don’t know, however, is that American Express also offers an online bank with competitive interest rates.
American Express Bank, FSB is an FDIC insured online bank (FDIC Certificate # 35328) located in Salt Lake City, Utah. It offers two savings products. First, the bank has high yield certificates of deposit of terms ranging from six to 60 months. Second, it offers a high yield savings account.
In this review we’ll look at the accounts Amex offers, its rates and fees, and how the online bank works.
High Yield Savings Account
The high yield savings account works like most savings accounts. Funds deposited in the account earn interest. You can withdrawal money from the account at any time. Keep in mind, however, that you are limited to six withdrawals per month. This limitation is not set by American Express. It’s actually a federal law:
Reserve Requirements for Depository Institutions (12 C.F.R. 204, Regulation D) is a Federal Reserve Board regulation. It limits the number of withdrawals and transfers from a savings or money market account. Regulation D (Reg. D) applies to all U.S. banking institutions offering such accounts. Personal Savings customers may make a maximum of six (6) Reg. D-covered transfers or withdrawals per statement cycle. There is no limit on the number of deposits that can be made.
The interest rates offered by American Express are competitive with other online banks. The yield on the savings account is currently 0.90% APY (as of September 22, 2015), and is subject to change. This rate is competitive with the highest available yield on savings accounts that we track.
American Express currently offers CDs in terms ranging from six to 60 months. As with most CD products, the interest goes up for longer term CDs. It’s important to note, however, that there may be penalty fees for taking your money out of the CD before it matures. The amount of the penalty depends on the term of the CD:
- For a CD with a Term of 12 Months or Less: If you withdraw all of your principal balance, or if the account is closed for any other reason, the penalty is 90 days’ interest on the withdrawn amount applying the interest rate disclosed in your account-opening documents.
- For a CD with a Term of More than 12 Months: If you withdraw all of your principal balance, or if the account is closed for any other reason, the penalty is 180 days’ interest on the withdrawn amount applying the interest rate disclosed in your account-opening documents.
Because of the penalties, it’s important to make sure you can keep your money in the CD during the entire term. If you are unsure, consider a shorter term CD or the savings account option.
Related: Learn how to build a CD rate ladder
Fees, Minimums & Support
Fees: There are no monthly fees
Minimum Balance: There is no minimum balance requirements.
Support: Because we’re talking about an online bank, customer service is critical. American Express Bank offers 24/7 account access. You can access your account online or call Amex.
Opening an American Express Bank Account
Here’s how you sign-up for an American Express account
Step 1: Gather Your Information
You will need this information for both primary and joint applicants:
- Social Security number
- Home Address
- E-mail address
- Phone Number
- Date of birth
- Your existing bank account and routing numbers (if funding electronically)
Step 2: Submit Application
Here you’ll choose the type of account you want to open, either a High Yield Savings account or a Certificate of Deposit. You can apply online or by phone at 1-800-446-6307.
Step 3: Receive Confirmation
You will receive an online and/or email confirmation when your application is approved. Additionally, you will receive an American Express® Personal Savings Welcome Kit in the mail.
Step 4: Fund Your Account
You can fund your online account, either by linking your current bank account or by mailing us a check. That’s why you’ll need your existing bank account and routing number. Online banks are generally funded electronically by transferring funds from your primary checking account. The idea is to move money you want to save to an online bank such as American Express in order to earn a higher interest rate than most brink and mortar banks pay.
Savings accounts and CDs aren’t designed for everyday spending. That’s what a checking account is for. So money you transfer to an account at American Express should be for longer term savings. That being said, you can fund an account at American Express via check if you want. You also get your money out of the bank the same way you deposited it, via electronic transfer.
You’ll find a lot of consumer reviews of American Express Bank on the Internet. Here are several of the ones I look at, along with the average consumer review from each:
Deposit Accounts: 4 out 5 stars based on 74 reviews
Credit Karma: 3.5 starts out of 5 based on 23 reviews
My Bank Tracker: 3 out of 5 stars based on 13 reviews
Wallet Hub: 4.5 out of 5 stars based on 30 reviews
If you’ve had an account at American Express, please share your review in the comments below.