American Express does offer high yield savings accounts through American Express Bank

American Express Bank offers a high yield savings account called the American Express Personal Savings Account. This is a deposit account held at the bank, separate from credit card products. The account earns interest on the money you deposit, and that interest rate is typically higher than what you would find at a traditional brick-and-mortar bank.

The account is online-only, meaning you manage it through a website or mobile app rather than visiting a physical branch. You can deposit money by electronic transfer from another bank account, and you can withdraw money the same way. The bank does not charge a monthly maintenance fee to hold the account.

Interest rates change over time based on market conditions, so the rate you see today may not be the rate you earn six months from now. Before opening an account, you can see the current rate on the American Express Bank website.

Key Takeaways

  • American Express Bank offers a high yield savings account that earns interest and has no monthly fee.
  • The account is managed entirely online through a website or app, with no physical branch locations.
  • You can move money in and out using electronic transfers from another bank account you own.
  • Interest rates are set by the bank and change based on market conditions, so compare the current rate before you open an account.
  • The account is FDIC insured up to the standard limit, which protects your money if the bank fails.

How the interest rate works and what you earn

When you deposit money into a high yield savings account, the bank pays you interest on that balance. The amount you earn depends on two things: how much money you have in the account and what interest rate the bank is currently offering.

Interest is usually calculated daily but paid monthly. That means the bank looks at your balance each day, and at the end of the month, it deposits the interest you earned into your account. If you leave the money in the account, next month's interest is calculated on the larger balance (the original deposit plus the interest you earned), which is called compound interest.

The interest rate itself is not locked in. American Express can change the rate at any time, and it usually does when the Federal Reserve changes its benchmark interest rate. You will see the new rate reflected in your account, but you are not required to keep the money there if the rate drops significantly.

Who can open an account and what you need

To open an American Express Bank savings account, you must be at least 18 years old and a U.S. resident. You will need a valid government-issued ID, your Social Security number, and a bank account at another institution to link for transfers.

The account opening process happens online. You provide your personal information, verify your identity, and link an external bank account. Once the bank confirms your identity and the external account is linked, you can begin depositing money.

There is no minimum deposit required to open the account, though some banks do require a small initial deposit. Check the current requirements on the American Express Bank website, as these can change.

How to deposit and withdraw money

Because the account is online-only, you cannot walk into a branch to deposit cash or withdraw money in person. Instead, you move money electronically between your American Express savings account and a bank account you own elsewhere.

To deposit money, you link an external bank account (checking or savings at another bank) to your American Express account. You then initiate a transfer from that external account to American Express. The transfer usually takes one to three business days to complete.

To withdraw money, you initiate a transfer from American Express back to your linked external account. Again, this typically takes one to three business days. If you need cash when ready, you would withdraw from your external bank account instead.

FDIC insurance and account safety

FDIC insurance is a federal protection that covers deposits at participating banks. If American Express Bank fails, the FDIC will reimburse you for the money in your account, up to a limit. That limit is currently $250,000 per depositor, per bank, per account type.

This means if you have $100,000 in your American Express savings account, all of it is protected. If you have $300,000, the FDIC covers $250,000 and you would lose the remaining $50,000 in the event of bank failure. The protection applies to the account itself, not to the interest rate or any promises the bank made about earnings.

The FDIC insurance is automatic — you do not need to do anything to set up it. It applies to all deposits at American Express Bank.

Comparing American Express to other high yield savings options

Several other online banks and financial institutions offer high yield savings accounts. The main differences between them are the interest rate, any fees, the minimum deposit required, and how straightforward the account is to use.

American Express is known for competitive interest rates and no monthly fees. However, the rate changes frequently, so a bank that offers a higher rate today may not offer the highest rate next month. If you are deciding between accounts, compare the current rates at the time you are ready to open an account, not based on rates from weeks or months earlier.

Some people keep savings accounts at multiple banks to diversify their deposits or to take advantage of different rates. There is no rule against this — you can open an American Express account and also hold a savings account elsewhere.

Frequently Asked Questions

Can I use a debit card to access money in the American Express savings account?

No. The American Express savings account does not come with a debit card. You can only move money out through electronic transfers to another bank account you own. If you need a debit card for everyday spending, you would use a checking account at another bank.

What happens if I need to withdraw money before a transfer completes?

Transfers take one to three business days. If you need the money sooner, you cannot speed up the transfer from American Express. You would need to withdraw from your linked external bank account instead. This is one reason many people keep a checking account at a traditional bank alongside a high yield savings account.

Is there a limit to how many times I can transfer money out each month?

Federal rules previously limited savings account withdrawals to six per month, but that rule was suspended. American Express does not currently impose a limit on transfers, though the bank reserves the right to change this policy. Check the account terms on the American Express Bank website for the current policy.

Do I have to pay taxes on the interest I earn?

Yes. Interest earned in a savings account is taxable income. At the end of each year, American Express will send you a Form 1099-INT showing how much interest you earned. You report this on your tax return. The bank does not withhold taxes automatically, so you may owe taxes when you file.

What if the interest rate drops significantly after I open the account?

You are free to close the account and move your money elsewhere. There is no penalty for closing an American Express savings account. However, you should compare rates at other banks before moving, because rates change across the industry at roughly the same time.