After opening the American Express High-Yield Savings Account, I thought readers might enjoy a brief review and comparison to other available options.
I’ve opened dozens of checking and savings accounts over the past five years. I find some of these accounts by reading online forums, while others are recommended by members of the Cash Cow Community. My efforts allow me to compare features, rates, customer service, and online user experience across a variety of financial institutions.
Although the American Express Savings Account offers a reasonably competitive interest rate, there are better alternative options providing up to 5% APY interest on savings.
In addition, American Express lacks many of the valuable features found at competitors. For example, American Express doesn’t offer a checking account whatsoever, which makes it difficult to transfer money, pay bills, or do anything else that requires regular transactions (by law, all savings accounts are limited to six outgoing transfers per month before excess fees are charged).
Discover Bank, on the other hand, offers a 1% Cashback Checking Account in addition to their High-Yield Savings Account (currently offering a $200 bonus) and allows free instantaneous transfers between both accounts and unlimited free transfers to any external accounts linked through Discover’s online dashboard.
These reasons, among others, lead me to recommend Discover as the best all-around option for readers.
American Express History
American Express Company, often called AmEx, is an American multinational financial services corporation headquartered in New York City. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average (stock ticker: AXP).
The company was recently ranked #86 in the 2018 Fortune 500 list of the largest United States corporations by total revenue. Forbes ranks American Express as the 23rd most valuable brand in the world (and the highest within financial services, estimating the brand to be worth $24.5 billion USD.
AmEx is primarily known for issuing credit cards, which account for approximately 23% of the total dollar volume of credit card transactions in the US (the highest of any card issuer). Retail banking is a much more recent venture for the firm, offered under the American Express FSB (federal savings bank) brand name.
American Express High-Yield Savings Review
The American Express High-Yield Savings Account is fully insured by the Federal Deposit Insurance Corporation (FDIC), up to $250,000 per depositor.
With this account, everything is handled online. There are no local branches to visit. You will not receive a debit card or checks in the mail. The purpose of this account is savings, and savings alone.
As I stated earlier, this is a major limitation and an obvious reason to maintain a separate checking account elsewhere.
- No Minimum Balance Requirements – You only need $1 to open the account, and you don’t have to maintain any particular balance. (Standard at all online banks)
- No Maintenance Fees – There are no fees to open or maintain your account. (Standard at all online banks)
- Automatic Transfers – You can establish automatic transfers to/from your external checking account, and schedule a direct deposit into your AmEx Savings Account. (Standard at all online banks)
- Solid Interest Rate – The AmEx rates are usually competitive with other online banks (but rarely best in class). Interest is compounded daily and credited to the account monthly, which is standard with online banks.
- Convenience – The application process takes only a few minutes if you have all of your personal information ready.
- Safety – FDIC insurance and a reputable brand that should be around for a long time.
How to Open an Account
Here are the steps required to open a new account:
- Gather and Input Information: They will ask for your SSN, address, email, date of birth and existing bank account information if funding your account electronically.
- Submit Application: Decide if you want a single or joint account, then answer a few identity questions before being approved.
- Confirmation: When approved, American Express will email you and send you a kit in the mail.
- Fund: You are required to link an external bank account and fund your new American Express Personal Savings Account with at least $1.
That’s it. These four steps took about 5 minutes to complete in my experience.
AmEx Online Savings Account Summary
Although the AmEx Online Savings Account is easy to establish and offers a relatively competitive interest rate, the lack of other account options severely limits the functionality and usefulness.
There are alternative nationwide accounts that provide up to 5% APY interest with more features and far more flexibility when making transfers. I outline how to establish and connect these accounts in my recent tutorial -> How to Maximize Your Interest on Savings.
As always, thanks for reading!