Member-FDIC American Express National Bank offers certificate of deposit (CD) accounts with terms ranging from six months to five years. The online bank offers some of the best CD rates we’ve examined. And it requires no minimum deposit. You won’t owe a monthly service fee either.
Plus, American Express compounds interest on a daily basis. This means your money earns interest today, and the new total earns interest the next day. This could mean stronger savings in the long-run, as opposed to investing in a CD that compounds interest monthly.
Below, you can view the current rates for American Express CDs.
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Overview of American Express CDs
Unlike several competing banks, American Express doesn’t require you to make a minimum initial deposit to open a CD account. Some banks require a minimum deposit of anywhere from $1,000 to $25,000 to earn their best rates. Not so at American Express.
You can currently open a five-year CD with a fixed annual percentage yield (APY) of 1.10% with an initial deposit of your choice. That rate climbs well above those offered by several major banks.
American Express compounds interest on a daily basis and credits it to your account on a monthly statement cycle. However, you can call the bank and have your earned interest transferred to your American Express High-Yield Savings Account or mailed to you via check.
Nonetheless, you stand to make the most out of these generous interest rates if you keep your money and interest in the account until the end of its term length. This is known as the point of maturity.
American Express will levy an early withdrawal penalty if you take your principal (money you initially deposited into the account) out before that time period. The severity of that penalty depends on the term of your CD and the point at which you make the early withdrawal. We outlined the bank’s current policy below. But keep in mind that the penalty will eat into your principal amount if it is greater than the available interest earned or credited to your CD.
- For a CD with Terms of Less than 12 Months: 90 days’ interest on the withdrawn amount.
- For a CD with a Term Between 12 Months and 48 Months: 270 days’ interest on the withdrawn amount
- For a CD with a Term Between 48 Months and 60 Months: 365 days’ interest on the withdrawn amount.
- For a CD with a Term of 60 Months or more: 540 days’ interest on the withdrawn amount
After your CD reaches its maturity date, American Express would automatically renew your CD with the same term length and applicable APY. Afterward, you have a grace period of 10 calendar days to withdraw your funds without penalty or add additional funds to increase potential returns from your renewed CD.
If you don't wish to renew your CD, you must call American Express before the maturity date and notify the bank. You may also send written notice before the end of the grace period.
How Much You Earn With American Express Certificate of Deposits Over Time
When it comes to American Express, you won’t earn much if you invest in a CD for the very short term. But an 18-month CD alone earns an impressive APY of 0.50%. And to earn its highest current APY, you’d have to open a CD for a term of five years. The rate for that one rises to 1.10% at the time of this writing.
And to your advantage, American Express compounds interest on a daily basis. Some banks do this on a monthly basis. So all other factors being equal, you stand to earn more at American Express. Below, we lay out calculations of what you can earn with some CDs offered by American Express based on current rates and varying initial deposits.
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How American Express CD Rates Compare to Other Banks
American Express National Bank offers accounts as an online-only entity so it has no physical branches for customers. But where it lacks in physical access, it makes up with its generous interest rates on CD options and savings accounts.
American Express currently offers a five-year CD with a rate of 1.10%. That rate towers over those linked to similar options at several major banks. Plus, you can open this CD with an initial deposit of your choice. Some banks require minimum deposits of a few hundred thousand dollars to earn their best rates.
Discover, for example, offers a five-year CD with an APY of 1.40%. But you'd need a minimum deposit of $2,500. You can open a CD with American Express for the same term with any minimum deposit. Its APY is at 1.10%
Below, we explore how American Express CDs differ from similar options offered by competing banks.
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Compare American Express National Bank to Other Competitive Offers
Should You Get an American Express CD Account?
If you’re looking for a high-yield CD option that you can manage entirely online or by phone, American Express seems like a good fit. You can open a CD with as little or as much as you’d like. And your money won’t get eaten away by maintenance fees. Furthermore, you get the advantage of having interest compounded daily.
But if you strongly value having face-to-face contact with customer service representatives to manage accounts, you may want to look elsewhere. Still, American Express can compete well with other online banks.