Business Insider's personal finance team compared American Express® CDs to the best CD rates and found it to be a middle-of-the-road offering. While its CD rates are more competitive than most brick-and-mortar banks, other online banks and credit unions pay even higher CD rates for the same terms.
That said, you might like a CD from American Express National Bank (Member FDIC) if you want to open an account with a low initial deposit. It's rare to find a bank that lets you open a CD with $0.
If you do choose to get an American Express CD, the 11-month, 1-year, and 2-year terms offer the best rates at the bank. The other CD terms aren't as strong, and you'll likely find much better rates at other online banks.
Current American Express CD Rates
American Express CD rates are higher than average CD rates. Here are the bank's current CD APYs (Annual Percentage Yields):
- American Express® 11 Month CD: 3.75%
- American Express® 1 Year CD: 3.60%
- American Express® 18 Month CD: 3.35%
- American Express® 2 Year CD: 3.50%
- American Express® 3 Year CD: 3.00%
- American Express® 4 Year CD: 3.00%
- American Express® 5 Year CD: 3.00%
Overview of American Express CDs
American Express National Bank only has standard CDs. These CDs have a fixed interest rate, which means your rate will remain the same for the full term. If you need to take out money before a CD matures, you'll have to pay an early withdrawal penalty.
If you're interested in specialty CDs, like no-penalty CDs or bump-up CDs, you'll have to choose a different bank.
American Express CD Rates Pros and Cons
American Express CD Rate Pros
- Solid CD rates that pay more than the national average
- No minimum opening deposit is required, which makes opening requirements more lenient to earn rates
- Several CD terms, so you could build a CD ladder to hedge against rate volatility
- Interest compounded daily
- Able to have interest paid out monthly through a linked savings/external account or paid out monthly, quarterly, or annually through a sent check (this may impact the APY earned, though, since interest doesn't stay in the CD)
American Express CD Rate Cons
- The best banks and credit unions for CDs may still pay even higher rates regardless of the term
- Other banks may have more term length options
- Standard-to-high early withdrawal penalties
American Express CD Alternatives
American Express CDs vs. Capital One 360 CDs
Capital One CDs currently pay 3.50% to 4.00% APY. Most Capital One CDs are slightly higher than American Express CDs of the same term length.
You may favor Capital One 360 over American Express if you prioritize low early withdrawal penalties. Capital One 360 CDs also come in a greater variety. For example, you could get a 9-month or 30-month term.
If you don't meet the minimum opening requirements at other financial institutions, American Express and Capital One 360 are equally good options. Both allow you to open a CD with $0.
American Express CDs vs. Barclays CDs
Barclays CDs offer 3.00% to 4.00% APY. Barclays has stronger short-term CDs, but for longer-term lengths, it'll depend on the term you choose. American Express has a few CD terms that are higher than Barclays, but for others they match up pretty evenly.
You might lean more toward Barclays if you're worried about early withdrawal penalties since it's a bit more lenient than American Express.
American Express might be a good option if you have an American Express card. If you are a card member with a U.S. Basic Consumer Card issued by American Express National Bank with at least 35 days tenure, you'll be eligible for the American Express® Rewards Checking Account. Barlcays doesn't offer any checking accounts.
American Express CDs: Understanding Your Options
American Express CD Online Banking Experience
If you get an American Express® CD, you'll have to be comfortable using a mobile app and desktop for banking because the bank doesn't have branches. That said, it does offer 24/7 live customer support by phone.
American Express CD Minimum Opening Deposit
Generally, most banks require a minimum of $1,000. At American Express National Bank, the minimum deposit is $0. This is the most lenient opening deposit requirement you'll find across financial institutions.
American Express CD Early Withdrawal Penalties
If you decide to withdraw money from an American Express CD before it reach maturity, the following early withdrawal penalties apply:
- For CD terms under a year, the penalty is 90 days of interest.
- For CD terms between one year and less than four years, the penalty is 270 days of interest.
- For CD terms between four years and less than five years, the penalty is 365 days of interest.
- For CD terms five years or longer, the penalty is 540 days of interest.
These penalties are high compared to other financial institutions. Other banks may also have no-penalty CDs, so you can make a fee-free withdrawal and avoid charges entirely.
What Influences American Express CD Earnings?
American Express CD rates can fluctuate over time because bank account interest rates are impacted by market conditions and the Fed's actions. This may sway whether you choose to open a CD or put your money in another type of safe investment.
To help you determine if a CD is a good fit, we'll briefly go over what affects CD rates and how to calculate potential earnings.
Market Conditions and Fed Actions
The Fed will adjust the federal funds rate so existing economic conditions meet their goals. They want to achieve and maintain maximum employment, price stability, and long-term interest rates.
Changes in the federal funds rate affect banking products. Generally, American Express CD rates increase when the Fed decides on rate hikes. If the Fed thinks there should be a rate cut, American Express CD rates will likely drop.
Usually, long-term CDs pay higher rates than short-term CDs. However, due to the current economic environment, many banks have short-term CD rates that are more competitive than long-term CD rates. American Express follows this larger CD trend to some extent.
CD Term Length and Opening Deposit
You can use a CD calculator to estimate your potential earnings on a CD. The CD term length and opening deposit amount can affect how much interest you'll earn overall. Longer CD term lengths and higher minimum opening deposits result in more interest earned on a CD.
Should You Invest in an American Express CD?
You might find American Express CDs appealing if you would prefer to open a CD with a low initial deposit.
American Express also might be worth considering if you are searching for an 11-month, 1-year, or 2-year CD. These terms have the most competitive interest rates at the bank.
If you plan on opening multiple bank accounts at the same financial institution, American Express National Bank (Member FDIC) also has a high-yield savings account and a rewards checking account. However, the American Express® Rewards Checking Account is only available to Consumer Card Members who have had a card account for at least 35 days.
You may prefer another financial institution if you're searching for CDs with more lenient withdrawal penalties. Other online banks also offer more competitive interest rates on CDs.
Why You Should Trust Us: How We Reviewed American Express CDs
We use the Business Insider certificate of deposit methodology to review Amex CDs. We look at ethics, mobile apps, customer service, interest rates, minimum deposits, term variety, and early withdrawal penalties. We assign each category a score between 0 and 5, then calculate the weighted average to determine a rating for Amex CDs.
We use a weighted average to get our star rating, which means we weigh certain features, like interest rates and fees, at a higher weight percentage than others. We understand that these areas can more heavily impact a person's overall banking experience. Star ratings can be from anywhere from one to five stars.
American Express CDs FAQs
American Express CDs pay more than average CDs. The bank's most competitive terms are its 11-month, 1-year, and 2-year options. Still, you can find even higher rates at other banks.
American Express CDs can be opened through the bank's website. You may open an American Express CD with $0. You'll need to deposit money in the first 60 days of account opening.
American Express doesn't have any specialty CDs. The only unique feature it offers for regular CDs is that they have a $0 minimum opening deposit. This is a rare perk for banks.
Yes. American Express CDs are FDIC-insured for up to $250,000 per depositor.
No. You don't need to have an American Express credit card to get one of the bank's CDs. New customers can apply for CDs online.
The best CD rate at American Express is 3.75% APY. This rate is available on the 11-month CD.
