Ready to build your emergency fund or start your very own CD ladder? Barclays Online Bank can help you do both. Our review covers the products, the pleasantly high interest rates and the low to zero fees you’ll find with Barclays online.
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Barclays Bank is a great option for a high-yield online savings account. Barclays has been in the industry for centuries, but it hasn’t been in the online banking business in the United States for long. Still, it came into the market with a great high-yield savings account and is continuing to add more offerings. Relatively new, Barclays’ online division for U.S. customers offers some of the highest savings account yields out there.
Even though Barclay’s online banking option is new, the bank itself is not. Founded in 1690, Barclays has long been a history-making bank. It funded the world’s first industrial steam railway, and introduced the very first ATM.
The long history of this British bank makes it a safe bet for consumers, but it’s the high yields and low fees associated with Barclays Online Banking that draw customers to this banking option.
Barclays Online Bank only offers two types of products: savings accounts and online CDs. Here, we’ll talk about the features of each product.
Barclays Online Savings Account Features
Currently, Barclays Online Savings account boasts a 1.80% APY – about 21x the national average, which, as of this writing, is about .09% according to the FDIC. Not only does the account have a much higher than average APY, but it also has no minimum balance and no monthly maintenance.
Features of Barclays Online Savings Account include:
- Link to external accounts: Since Barclays doesn’t offer a checking account, you might be wondering how you can easily get money into the account. Barclays allows you to link your account to an external account, including payment processing systems like PayPal. When you link your accounts, you can easily make transfers into and out of your Barclays account via ACH transfer, which takes 2-3 days.
- Multiple deposit options: Barclays Online Savings account offers several ways to deposit money into the account. You can set up direct deposit, mail a check to the bank, or transfer funds through ACH transfer from a linked account. Barclays customers can also add money to their accounts almost instantly with the bank’s Remote Deposit option. This option allows you to deposit checks remotely using your PC or Smartphone.
- App for account management: Barclays has a nice mobile app you can use to manage your savings account, make transfers, and deposit checks from your phone.
Barclays Online Savings Account Fees
As noted above, this savings account doesn’t have any monthly maintenance fees. But, like most bank accounts, it does charge fees for some things, including:
- Excessive Transactions: 6 free transactions then $5 for each withdrawal or transfer in a month
- Official Check: $5
- Returned Deposit: $5 per item, but not more than $50 per business day
- Non-Sufficient Funds: $5 per item
- Statement Copy: $.50 per item
- Express Mail: $25
Barclays Online CD Features
Barclays doesn’t just boast a high APY for its online savings account; its online CD options also have some of the highest rates available today. These FDIC-insured accounts offer fixed savings rates with no minimum balances and no monthly maintenance fees.
While rates are subject to change, as of October, 2019, Barclays offers one of the highest-yielding 60-month CDs available. While its shorter-term CDs are sometimes beat out by other banks–particularly the well-known online bank Ally–Barclays holds its own in these categories, as well.
Barclays Online CD features include:
- Many term options: Currently, you can get a CD for a term from 3 months to 60 months.
- Automatic renewal: You can automatically renew a CD on the date of maturity if you’d like. Or you can cash it out within fourteen days of its maturity date.
- No minimum: Many CD products require a minimum investment, often a rather large one. But the Barclays Online CD has no minimum deposit to open a CD or maintain your account.
- CD ladder tool: Barclays has a great calculator tool for building a CD ladder. This lets you move your money from one CD to another so that you always have some liquid cash while still being able to take advantage of the higher yield you’ll get with a CD versus a regular savings account. If you’re trying to figure out how to build a CD ladder, Barclays has a great tool for that on its website.
Barclays Online CD Fees
The fees for Barclays Online CDs are also fairly typical. They include:
- Early Withdrawal: For CDs with terms less than 24 months, 90 days’ simple interest on the amount withdrawn that is subject to the penalty. For CDs with a term longer than 24 months, 180 days’ simple interest on the amount subject to the fee.
- Statement Copy: $.50 per statement
- Express Mail: $25
If that first fee looks confusing, that’s because CD fees are a little confusing. Your best bet with any CD is to only put money into a CD that you can afford not to have access to until the CD term has ended. Otherwise you’ll pay some of your interest earned in the form of a penalty if you do an early withdrawal.
Applying for a bank account or Certificate of Deposit with Barclays Online Bank is similar to applying for an account with any other bank. You’ll need your Social Security number to set up your account, as well as your personal contact information. You’ll also need the name, routing, and account number of an external bank you’ll use to fund your accounts.
When you set up the account, you can apply for up to five savings accounts or CDs at the same time, but they’ll all have to have the exact same owner and, if applicable, joint owner. So if you want to apply for one share savings account and then a personal CD, for instance, you’ll need to fill out separate applications.
Remember that if you’re applying for a joint account with someone who isn’t already a Barclays Online Bank customer, you’ll also need to provide that person’s Social Security number, date of birth, and contact information.
Again, be sure you have your current banking information available when you fill out the application, as you’ll need to provide Barclays with the information they need to fund your new account.
Barclays uses the latest online security protocols to protect customer data as best they can. This includes SSL and TLS security with 129-bit encryption. If that’s Greek to you, it basically means they’re using the industry standard security protocols that banks all over the world use. They also keep unauthorized traffic out of their sites and help you protect your own data by enforcing strong password rules and authenticating your logins.
Barclays Online Bank offers an app that lets you check your balance, transfer money between accounts, and make mobile check deposits.
Barclays Online Bank has mixed reviews online for customer service, though there’s more good than bad. As with all online banks, if you want to talk to someone about your account in person, you’re out of luck. But if you don’t mind sending support requests through an online form or talking with someone on the phone, you can typically get your problems solved quickly.
- Excellent rates: This is the biggest pro on the list. While you’re still not going to retire on a 1.80% APY, it’s a great savings rate for when you need to maintain liquidity, like with an emergency fund.
- Easy to sign up: The online sign up process is simple and shouldn’t take more than a few minutes and some basic information you likely have on hand.
- Several CD options: Building a CD ladder is easy at Barclays because they have so many term options available.
- No minimums: Even on their CDs, Barclays doesn’t have any minimum deposits to open an account, which makes it easy to start a CD ladder even if you don’t have thousands of dollars available to save.
- No-to-low fees: With no monthly fees for a savings account, you’ll actually get to keep that high APY. And even fees for typical charges like overdraws are fairly low.
- Lower rates for short-term CDs: Unless you’re using Barclays shorter-term CDs as part of a ladder structure, you might want to shop around for short-term CDs. You can’t beat their 60-month rate, but you can find better rates on short-term CDs.
- No physical locations: Barclays is an online-only bank, so if you want to get customer service in person, you’ll need to look elsewhere.
- No checking account: If you prefer to keep your checking and savings with the same bank, you also cannot do that with Barclays Online Bank. They have no checking account option at this time, so only online savings and CDs are available.
If you’re in the market for an online-only account, which is the best way, typically, to get a high-yield savings account, you have some options. These include Goldman Sachs, Synchrony Discover and FNBO Direct.
If you’re in the market for a high-yield savings account that doesn’t necessarily need to be attached to your everyday checking account, you can’t go wrong with Barclays Online Savings. With no monthly maintenance fees and a 1.80% APY, you’ll get more bang for your buck. It’s also a great option if you’re looking for a longer-term CD, since you can get a 2.20% APY with a 60-month CD.
For a standalone savings account, this is a great deal. Just be sure you don’t need to transfer money into and out of the account more quickly than with 2-3 days’ notice, and you’ll be good to go.
Barclays Bank has been serving customers well for centuries, but it seems to be just testing the waters with its online bank component. Even though it only offers savings accounts online in the United States, it is able to offer great yields on those products, making it a solid option for those shopping for a place to park mid-term savings or an emergency fund.Topics: Banking