I hate to admit it, but I’ve been using the same bank accounts for nearly a decade. Shortly before graduating college I went into my local Bank of America branch and setup a checking and savings account. Since then, those are the only bank accounts I use.
I’ve been using those same Bank of America accounts for years because they’ve worked just fine. My paychecks are deposited into my checking account, I pay my credit cards from that account, and I move the excess to savings. If my savings account grows too large, I move those funds into a brokerage account I use for long-term investing.
There are really only two problems I’ve had with this strategy. First, I have had to pay some ATM fees when withdrawing money while traveling. Second, I only earn 0.02% interest on my savings account balances! That is an extremely low interest rate, even today when rates are at historic lows.
Thankfully, all of this time at home has finally given me time to address that second point. So, a few days ago I opened an American Express High Yield Savings account.
Introducing American Express High Yield Savings Accounts
First of all, yes, that American Express. The popular credit card issuers, American Express (Amex) offers more than just credit and charge cads. In fact, American Express offers personal loans, certificate of deposits, and even savings accounts.
What makes their savings accounts special is that they are what is known as “high yield” savings accounts. That means they pay a much higher interest rate on deposits. In fact, at the time of writing American Express is offering a 1.50% APY on deposits.
That means, if you deposit $10,000 in an American Express savings account, you’ll earn $150 of interest in a year.
If you’re curious about how much interest you can earn from a high yield savings account, American Express has a handy calculator on their sign-up page. I’ve included an example below which includes annual interest income for one year with an initial deposit of $10,000 and weekly deposits of $100.
In the example, you can see that given current interest rates, you can earn up to $189 in interest. It’s important to remember that interest rates change over time and could decrease. Likewise, interest rates could increase which makes these accounts even more rewarding.
Opening An American Express Savings Account
American Express makes it incredibly easy to open a high yield savings account online. To start, simply visit AmericanExpress.com and click on the “My Accounts” button at the top of the page. Within the my accounts drop down is a subheading for “Other Accounts” which includes a hyperlink for their High Yield Savings Accounts.
Once you reach the Personal Savings account page, you’ll see a button to “Apply for a Savings Account.” When you click that button you’ll reach an application page which asks for the same basic information included in a credit card application. This includes an email address, social security number, and date of birth.
After agreeing to the terms and conditions, Amex will then ask you for your current bank account information to initiate an initial transfer. You can also mail in a check to fund the initial deposit if you’d prefer.
If you’re “accepted” and use a bank wire transfer to fund your account, Amex will request two test transfers from you bank account. You’ll then have to log into your account to confirm the test amounts before Amex will initiate the transfer for the full amount.
Choosing An American Express Savings Account
American Express isn’t unique in offering an online high yield savings account. A simple Google search will show you that several banks also offer online savings account, some with even higher interest rates. However, I chose American Express for simplicity. The interest rate was as good as others so I wanted to stick with an institution that I already have a relationship with. My thought process here was that I’d have one less login to worry about. I was hoping that when I logged into my Amex card accounts, I’d see my savings account right there on the main dashboard.
Unfortunately, this wasn’t the case. When signing up for my Amex savings account I was asked to create a new, unique, online login for the account. Also, to access the account I have to use a separate link on the homepage. Overall, I was a bit disappointed that the account is completely separate from my card accounts.
Despite my disappointment about lacking a single login, I’m excited to have finally moved my savings over to a high yield savings account. On average, I try to keep at least 6 months of cash in a savings account. Sometimes more, sometimes less. In looking back at 2019, I earned $3.43 in interest from my savings account. This means I maintained an average balance of $17,150. Had I instead put those funds in a high yield savings account, I would have earned $257.25 at the current 1.50% APY. So, even though I don’t have a single login, I’m still earning a lot more in interest than I was previously.
Final Thoughts
I’ll admit, if I had to do it all over again I probably would have chosen a Capital One 360 savings account. That’s because Capital One offers the same 1.50% APY, but is currently offering $100 for every $10,000 deposited into new accounts. That’s a large cash bonus for opening a savings account.
If that bonus didn’t exist, I would most likely have stuck with American Express. While I don’t have a single login I do still only have to visit one webpage. This makes life a lot easier each month when I pay my credit card bills and can also login and check my savings account balance.