American Express Bank now offers a couple of personal investment online banking products. Their highest CD rates are on a 2 year/24 month certificate of deposit with 2.00% APY interest.

AMEX Bank also has a variable interest rate “high yield’ savings account that currently earns a generous 1.50% APY. While this bank rate is subject to change it is defintely a competative rate. Capital One direct banking (online only) actually has higher savings rates at 1.55% APY but $2,500 minimum average daily balance must be maintained to earn that interest rate. Also the first twenty five hundred dollars in the account do not earn any interest at all: 0%. American Express pays interest on the entire bank account balance.

Open an online savings account at Capital One Bank and get a 2.01% annual percentage yield (APY) on balances of $10,000 or more. There are no fees, easy online transfers to and from existing accounts and since the FDIC deposit insurance has increased, you can safely deposit up to $250,000 ($500,000 for joint accounts) until December 31, 2009. This is one of the highest savings rates in the nation at the moment.

Higher Interest Rates – The difference can be massive: sometimes as much as 3-5%.
24 Hour Online Account Access – Transfer funds and view your account details anytime, anywhere.
Diversify Risk – Open additional accounts with different financial institutions to enjoy additional FDIC coverage.
Save Money – Instead of spending it, save it for a rainy day.
Make Money – Consider opening an online savings account as investment in your future. You will be earning a return on your investment while keeping your money safe.

Transfer Time – It can take a few days to transfer money from your external account to your online bank account and vice versa.
Security – Even though online banks use the highest online security standards, you are transmitting sensitive information over the Internet. If your username and password are stolen someone could have access to your account information. Be aware of phishing and scams to protect yourself.

Traditional brick and mortar banks have costs associated with running their business. Labor and rent is expensive so it’s difficult for traditional banks to offer high savings rates to their customers. Online bank accounts can be accessed anytime without the assistance of a teller. Cost savings can be passed on to the investor in the form of higher interest rates.