American Express High Yield Savings account review: annual and monthly maintenance fees, ATM fee, interest rates, required minimum daily balance and deposit, FDIC insurance, pros and cons.

American Express High Yield Savings Account

With the national average savings accounts hovering close to 0.1%, consumers let their money erode away from inflation. Some online banks have taken advantage of the opportunity to have high interest rates. Without having to fund numerous brick-and-mortar branches, consumers can ensure their money can grow (at least a bit).

Some of these FDIC-insured online banks include Ally (0.5% APY), Goldman Sachs (0.40% APY), and CIT Bank (0.70% APY). This list also includes American Express at 0.40% APY.

One may think to choose the highest-yield online bank, but having a 0.2% edge over AmEx only gives the consumer $2 per $1000 deposited per year (it is so insignificant; does that really matter?). These banks require very low minimum deposits and require no account maintenance fees. Really, what matters is customer preference.

Is having a bank account necessary?

Robert T. Kiyosaki’s Rich Dad Poor Dad suggests that one’s money should be though of as their “employees” in that money should be working for the owner, not just sitting there. Banks embrace this, as they try lending out 90% of their money (well, other people’s money) according to FDIC regulations.

Yet, it is still a good idea to keep an emergency fund of 3 to 6 months’ expenditures close by just in case of a sudden important expenses like dental surgery, a major repair for a vehicle used to get to work, or job loss. This is where a high-yield bank account comes in. Keeping this fund in the market is risky; CD’s are also difficult to access and have early-withdrawal penalties. But a high-yield bank account will allow money to stay safe, close by, and kept up with inflation.

American Express

American Express has gained much traction over its main competitors Visa and Mastercard. Few places in the U.S. do not take American Express. Over the past decade, American Express has attracted customers with great cards that offer cash back, rewards, miles, and sign-on bonuses. With this widening customer base, having an online savings account with them seems like a no-brainer, particularly for a company already in a similar business.

American Express Savings Account Review

The Good News with AmEx Personal Savings

American Express’s online savings account operates like any online bank. At 2.10% APY, it is FDIC-insured, so customers should not fear for the safety of their money. It allows customers to have direct deposit of paychecks, pay bills online, and easily make transfers with up to 3 other banks.

Customer Service: Customer service is also available 24/7. Having no branch to visit, it can be frustrating to not deal with banking needs in person. Yet, it is helpful for working people that banking needs can be dealt with in the evenings and on weekends.

AmEx Personal Savings’ website also offers a convenient calculator to see how one’s funds will grow with time in the account. (To be fair, this calculator is no good for someone who understands inflation and is looking at long-term investing.)

Certificates of Deposit: AmEx also offers competitive rates for CD’s 18 months and longer. These rates are very competitive with brick-and-mortar banks like Wells Fargo. Accounts longer than 18 months are better or tie with Ally’s rates.

Amex Savings Account Review

The Bad News with AmEx Personal Savings

With millions of customers, one would think that these folks should open an online savings account with AmEx. Why not? One login for both credit cards and banks? This ease is what makes credit cards issued from traditional brick-and-mortar banks so attractive.

Separate Accounts: Unfortunately, American Express admits that these accounts are separate. Separate! (Apparently it is impossible to even use the same logins and passwords for each.) To think that AmEx would come up with such a great idea an execute it poorly!

Is this so bad? It may depend on the type of person you are. American Express allows bill pay from its Card login (NOT savings login); however, this is only for confirmed purchases. To those with the habit of going home and paying off their credit cards immediately after spending, they have to wait (it is a responsible habit and great for ensuring no balance transfers; forgetting can risk one’s credit score). Whereas an external bank will allow bill pay immediately, and AmEx accepts those early, even frequent, payments from bank transfers.

What about check deposits? That will cost you an envelope and 49 cents in postage (a millennial might have to look up how to mail that letter, too). American Express does not allow users to scan or take images of checks for deposit. Yet Ally does, as do many brick-and-mortar banks.

What about checks and debit? AmEx has the ability to issue these checks and debit cards like its competitors, but this is not a feature for AmEx Personal Savings (it is a savings account, not a checking account). While checks can be made by jumping through several hoops (meaning, calling them up and requesting one), writing a check is simply a no-go for anyone who likes convenience. Debit is also not a feature for AmEx Personal Savings customers. While AmEx offers prepaid debit cards, the website specifically states that the savings account is not meant for daily transactions. Therefore, Regulation D will prevent more than 6 transactions per month.

Amex High Yield Savings Review Verdict

American Express Personal Savings is a bare-bones minimum for those seeking a high-yield savings account online. Its rates are competitive with other online banks and should keep funds up with inflation.

However, prospective customers should be aware of all the lacking features of this service. The ideal customer is someone who likes AmEx and needs a place to store an emergency fund and leave it. Beyond that, AmEx Personal Savings is a glass piggy bank with little access without a hammer. AmEx Card users will be disappointed with the lack of connectivity between Personal Savings and card services.

If one is looking for an alternative to the big traditional banks, then online banks are worth investigating. However, for most people, AmEx Personal Savings is not the best answer. It simply lacks services that people need in a bank. Other online banks offer many more services and the same competitive rates. Even if one is not giving up their brick-and-mortar bank, it would be best to choose an online bank that offers these services, should one decide to ditch the big banks altogether.