American Express introduces a business banking product that offers higher yields on idle cash to companies. American Express Business Savings account that will launches on September 15 extends a 2.95 percent annual percentage yield without a minimum balance or monthly maintenance charges.
The product is placed with the current Business Checking account as the “all in one” proposition of the unique American Express Business Banking platform. Business owners can open a checking account, a savings account, or both, with one application and administer both accounts in the same space (online and in the Amex application). There is not a charge for the transfer of funds from one account to the other instantaneously.
Transfers into and out of this account are also flexible. Customers have the ease of moving money in and out of the account using ACH, wire, or check deposit with no extra fees. Same-day ACH can be used for a one-time fee of ten dollars if speed is a priority. This account also offers integration with accounting software and bank linkages to keep book keeping in tune with the balances and activity.
American Express is framing the new deposits product as the next step in its effort to offer its small and midsize business customers the most comprehensive set of financial services possible. This fall, owners of the new Graphite Business Cash Unlimited card will be able to convert their reward dollars to deposits at a 1:1 rate into a Business Checking account. By the first of the year, Amex will roll out an AI-enabled payroll product provided by Gusto offering insights into tax management, compliance and cash-flow projection.
Against the backdrop of a fiercely competitive yield landscape, the 2.95% is attractive because Amex have done away entirely with fees and balance barriers, which many more conventional business savings accounts still apply. By removing those friction points, Amex is after business owners who want simplicity and a decent return.
Funds are deposited with American Express National Bank. They are FDIC insured up the to normal limits. Support is provided 24/7, consistent with the level of service Amex customers have become accustomed to with its card products. The relative attractiveness of the rate, the fee free structure, ease of transfer, and the promise of even greater integration with cards and payroll applications might provide a useful daily banking vehicle, and not merely a separate savings silo.
For many small businesses, cash is often sitting in operational accounts making very little return because pulling it out or moving to another account or vehicle somehow seems too burdensome. Having a savings account that is embedded in the same online universe as them is a bonus.
