Quick Take: American Express National Bank, Member FDIC, is expanding its offerings beyond its high-yield savings account and line of CDs with a new, all-digital checking account known as the American Express Rewards Checking account. With the account, customers can earn Membership Rewards points on eligible debit card purchases. For anyone who has been unsuccessful in paying certain bills or expenses with a credit card to earn more points or miles, the new Rewards Checking account is a great workaround when an American Express credit card isn’t accepted (or the convenience fee is a deal breaker).
- Interest Rate
- Mobile App
How did we calculate this?
- No monthly fees
- High annual percentage yield of 0.50%
- Eligible debit card transactions earn one Membership Rewards point per $2 spent
- Points can be redeemed for travel, gift cards and more
- Only available for American Express personal credit card holders who are eligible
- No sign-up bonus
- American Express National Bank may perform a hard pull on your credit file before your account is approved
- Debit card purchases are subject to foreign transaction fees
American Express Rewards Checking Account Overview
American Express is well known for its premium rewards credit cards. After listening to what current cardholders have to say about the ideal checking account, American Express National Bank, Member FDIC, launched the Rewards Checking account on Feb. 8. The account was created “to deliver more value for Members with the powerful and trusted backing of American Express,” Eva Reda, executive vice president and general manager of the Consumer Banking division of American Express, said in a press release.
If you like the idea of digital banking that comes with no monthly fees and can be handled using a debit card and an app, the American Express Rewards Checking account could be right for you. Unlike other online-only checking accounts, you can earn rewards that can be redeemed for travel, experiences or gift cards. But first, you’ll need to have had an American Express personal credit card account for at least three months to be eligible for a Rewards Checking account.
Features of the American Express Rewards Checking Account
Here are the details on the Rewards Checking account’s best features — as well as what can improve.
A big selling point is the lack of several types of common fees. There won’t be any overdraft charges to worry about since a debit card transaction will simply decline if you don’t have the funds in the checking account to cover it. There are no monthly maintenance or minimum balance fees either. You can also make free withdrawals at over 37,000 MoneyPass ATMs.
The account isn’t entirely free of fees — transactions conducted in foreign currencies come with a charge of 2.7%. Luckily, such transactions are typically rare for the average account holder.
You can earn an APY of 0.50% on the balance you hold in the American Express Rewards Checking account. That’s higher than what you can expect to earn at many brick-and-mortar banks.
The most unique feature of the American Express Rewards Checking account is the rewards perk. You’ll earn one Membership Rewards point for every $2 in eligible debit card purchases. The points will go toward the same Membership Rewards account linked to your existing American Express card so you can maximize the amount you can earn to use toward travel, gift cards, deposits into your Rewards Checking account, and more.
With the American Express mobile app, you have 24/7 access to customer service via its chat feature. You can also use the app to deposit checks, send money to Venmo or PayPal users, set up monthly American Express bill payments, manage your alerts and more.
The account’s linked debit card is an alternative to checks and can come in handy to make withdrawals or make cash-free payments. It may be a great way to slide in and pay your mortgage or taxes without the convenience fee charged on credit card payments.
However, it’s too early to tell how many merchants will accept the linked debit card. Most debit cards are issued by Visa or Mastercard, which are readily accepted just about everywhere. A debit card by American Express National Bank, Member FDIC, may run into the same hurdles as American Express credit cards and may not be accepted at all the places you frequent.
One item many consumers are used to is bonus rewards for signing up for a new account. There isn’t a bonus when you open a Rewards Checking account.
In addition, depositing cash isn’t an option. As mentioned above, if you need to make a deposit into your account, you can deposit a check by using the mobile banking app. Alternatively, you can send a physical check to American Express National Bank by mail or initiate an online transfer from another account. If these options are too limited for your needs, you may want to look elsewhere for an online bank that allows for cash deposits or a more traditional bank with physical branches.
American Express Rewards Checking Account vs. the Competition
Here’s a look at how the Rewards Checking account stacks up against a few other options you might consider.
American Express National Bank, Member FDIC vs. Ally Bank
While both financial institutions offer online-only checking, Ally Bank’s checking account features an APY of up to 0.25%, which is lower than what the American Express Rewards Checking account offers. However, Ally Bank provides a larger range of accounts than you’d find with American Express National Bank. On the other hand, Ally can’t compete with American Express when it comes to credit cards, so it’s all about what’s more important to you.
American Express National Bank vs. Discover Bank
Comparing two financial institutions known for their credit cards can be challenging. Both companies offer free checking. Each offers rewards. The difference is that Discover’s rewards program is about cash back while American Express National Bank’s is about points that can be redeemed. Another big difference is that Discover gives you the option of ordering paper checks and offers more accessibility to free ATMs with over 60,000 locations available compared to 37,000 from American Express National Bank.
American Express National Bank vs. Axos Bank
If you tend to keep a significant cash balance in your checking account, maximizing the amount of interest you can earn is probably a priority. American Express National Bank’s APY of 0.50% is fairly competitive. However, Axos Bank has an online Rewards Checking account that features practically no fees and earns as much as 1.00% APY.
Is the American Express Rewards Checking Account Right for You?
The new digital checking account from American Express National Bank, Member FDIC, may be a great option if you can’t live without your American Express credit card. You’ll receive the same level of support you’re used to, as well as more Membership Rewards points each time you spend on eligible purchases using the account’s linked debit card. You’ll need to spend $2 to earn one point, which isn’t the most generous rewards offer, but it’s still a great opportunity to earn points on banking transactions you normally wouldn’t get anything for.
Although the new checking account is promising, it’s hard to know yet how widespread acceptance of American Express National Bank’s debit card will be. If more merchants are willing to take the debit card, it could be a great backup when your American Express credit card isn’t accepted.
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of Feb. 14, 2022.
Editorial Note: This content is not provided by American Express. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone and have not been endorsed by American Express.
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