American Express offers 4.00% APY on their high yield savings account, though the rate changes with the Federal Reserve
American Express Bank's high yield savings account pays 4.00% annual percentage yield (APY) as of the most recent update. This rate is not fixed — it moves when the Federal Reserve changes its benchmark interest rate, which happens several times a year. You should check the current rate on the American Express website before opening an account, because the rate you see today may be different from the rate you earn next month.
The account has no monthly maintenance fee, no minimum balance requirement, and no limit on how many deposits or withdrawals you can make each month. Interest compounds daily and deposits into the account are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor.
You do not need to be an American Express credit card holder to open this savings account. The account is available to anyone with a Social Security number and a U.S. address.
Key Takeaways
- The current APY is 4.00%, but this rate changes when the Federal Reserve adjusts interest rates, so check the American Express website for the rate that applies to new deposits today.
- There is no minimum balance, no monthly fee, and no limit on how many times you can move money in or out each month.
- Your deposits are FDIC insured up to $250,000, which means your money is protected if the bank fails.
- You can open the account online in about 10 minutes using your Social Security number, driver's license, and a funding source.
How the APY compares to other high yield savings accounts
High yield savings rates across the banking industry move together because they all track the Federal Reserve's actions. When the Federal Reserve raises rates, American Express and other banks raise their APY. When the Federal Reserve cuts rates, all of them fall.
At any given moment, some banks offer slightly higher or lower rates than American Express. The difference is usually less than 0.25% APY. Over a year, that difference matters more on larger balances — on $10,000, a 0.25% difference is about $25 in annual interest. On $100,000, it is about $250. You can compare current rates across banks on financial websites that track savings rates, but understand that the ranking changes frequently as banks adjust their rates.
American Express's main advantage is that the account is simple to manage — no minimum balance, no fees, and straightforward online access. If you already bank with American Express or use their credit cards, the account integrates easily into your existing setup.
How to open the account and fund it
You can open an American Express high yield savings account entirely online. The process takes about 10 minutes and requires your Social Security number, a government-issued photo ID (driver's license or passport), your date of birth, and your address.
Once your account is open, you can fund it by transferring money from another bank account you own. American Express will ask you to verify the external account by making two small test deposits (usually under $1 each) to that account, then confirming the amounts. This verification step typically takes one to two business days. After verification, you can transfer money freely between your American Express account and your other bank accounts.
You can also deposit money by having your employer or another source send direct deposits to your American Express account. American Express will provide you with routing and account numbers for this purpose.
When interest is paid and how it compounds
American Express compounds interest daily, meaning the bank calculates how much interest you have earned each day and adds it to your balance. That new balance then earns interest the next day. Over time, this compounding effect means you earn slightly more than the stated APY would suggest on paper.
Interest is credited to your account monthly, on the last business day of each month. You will see the interest payment appear as a deposit in your account. The amount varies slightly from month to month because the number of days in each month is different, and because the APY may have changed during the month.
If you withdraw money before the end of the month, you still earn interest on the balance you held during that month. There is no penalty for withdrawals, and no minimum time you must keep money in the account.
Tax reporting and 1099 forms
If you earn $10 or more in interest during a calendar year, American Express will send you a 1099-INT form by January 31 of the following year. This form reports your interest income to the IRS and to you. You must include this interest as income on your federal tax return.
If you earn less than $10 in interest, American Express will not send a 1099-INT, but you are still required to report the interest income on your tax return if you file one. Keep your own records of interest earned each month so you can report the correct total.
Interest earned in a high yield savings account is taxed as ordinary income at your marginal tax rate. If you are in the 24% federal tax bracket, for example, earning $400 in interest means you will owe roughly $96 in federal income tax on that interest (plus any state income tax, depending on where you live).
What happens if rates fall or the account changes
American Express can lower the APY at any time without notice, and they do so whenever the Federal Reserve cuts rates. You will see the new rate reflected in your account dashboard, and interest will be calculated at the new rate going forward. You are not locked into the current rate.
If rates fall significantly and you want to move your money elsewhere, you can transfer your balance to another bank's high yield savings account at no cost. American Express does not charge a fee to close the account or move money out. The transfer itself takes one to three business days, depending on the receiving bank.
American Express can also change the account terms — for example, by adding a monthly fee or a minimum balance requirement. They must notify you of material changes in advance, typically 30 days before the change takes effect. You would then have the option to close the account before the change applies.
FDIC insurance and what it protects
Your deposits in an American Express high yield savings account are insured by the FDIC up to $250,000 per depositor, per bank. This means if American Express Bank fails, the FDIC will reimburse you for up to $250,000 of your balance.
The $250,000 limit applies to each depositor at each bank separately. If you have $150,000 in an American Express savings account and $100,000 in an American Express money market account, both are covered because they are at the same bank but are different account types. If you have $200,000 in an American Express savings account and $100,000 in a savings account at a different bank, both are fully covered because they are at different banks.
FDIC insurance does not protect you against fraud, hacking, or your own mistakes — for example, if you accidentally transfer money to the wrong person. It protects you only against the bank's failure. To protect your account from unauthorized access, use a strong password, enable two-factor authentication, and do not share your login credentials.
Frequently Asked Questions
Can I withdraw money whenever I want without a penalty?
Yes. American Express high yield savings accounts have no withdrawal limits and no penalties for taking money out. You can withdraw your full balance at any time. Interest is paid monthly, so if you withdraw before the end of the month, you still earn interest on the balance you held during that month.
What is the difference between this account and a money market account?
American Express also offers a money market account that currently pays the same APY as the high yield savings account. The main difference is that a money market account may come with a debit card and check-writing privileges, while the savings account does not. Both are FDIC insured up to $250,000. Check the American Express website to see which features matter to you.
Do I have to keep a minimum balance?
No. There is no minimum balance requirement. You can open the account with $1 and earn interest on that $1 at the stated APY. You can also let the balance sit at $0 without penalty, though you will not earn any interest.
How do I move money out if I want to close the account?
You can transfer your balance to another bank account you own by initiating an external transfer through your American Express account dashboard. The transfer takes one to three business days. Once the balance is zero, you can close the account online. American Express does not charge a fee to close or to transfer money out.
What happens if the APY drops to 0.50% or lower?
If rates fall that far, your interest earnings will be much smaller, but your money is still safe and still earning whatever the new rate is. You can move your money to another bank's savings account at no cost if you want to chase a higher rate elsewhere. There is no penalty for leaving.