This online bank offers ways to save your money including money market accounts and CDs with high interest rates and great perks.
Founded in 2003, Synchrony is an online bank that specializes in savings products, offering savings and money market accounts, CDs and IRAs. Its online-only business model allows it to cut overhead costs to offer competitive rates and no monthly service fees. If you’re looking to opening a checking account or like banking in person, however, you’ll need to look elsewhere.
What banking products does Synchrony offer?
- Synchrony High Yield Savings. A high-yield online savings account that offers 2.05% APY.
- Synchrony Bank Money Market. Get 1.2% APY with no minimum balance requirements and easy online access.
- Synchrony Bank CDs. With terms between three and 60 months, this account can help you earn up to 2.75% APY.
- Synchrony Bank IRA Money Market. Choose between traditional and Roth IRA accounts with a 1.2% APY to help you save for retirement.
- Synchrony Bank IRA CDs. Grow your retirement savings using traditional and Roth IRA accounts with up to 2.75% APY.
How does it compare to other banks?
With $57 billion in deposits, Synchrony Financial is the 31st largest FDIC-insured institution in the country. While that pales in comparison to the Big Four’s combined $8.6 trillion, it’s the second largest online-only bank in the US. Instead of having physical branches, banking completely online allows customers to easily access their money through its mobile app and efficient online platform.
It’s provides the most store-brand credit cards in the US and offers a specialized CareCredit card for healthcare procedures and services. In fact, as of 2014, it issued over 42% of all private label credit cards in the country, with clients including Amazon, Gap, Lowe’s and Walmart.
Why should I open an account at Synchrony?
When you open an account with Synchrony, you’ll get access to a number of benefits:
- Synchrony Perks program. Enjoy no monthly service fees, identity theft resolution services, travel and leisure discounts and more.
- Mobile banking. Synchrony offers a convenient mobile app that allows customers to open accounts, manage funds, order checks and more.
- Great rates. Since Synchrony is an online-only bank, it’s able to cut overhead costs and offer higher interest rates than many of its competitors.
- Convenient customer service. Access its 24/7 automated phone service or speak to a representative on weekdays from 7 a.m. to midnight ET.
- No ATM fees. Synchrony doesn’t charge ATM fees and reimburses you up to $5 per statement cycle for ATM owner fees.
- No fees for exceeding six withdrawals. Federal regulations limit the number of withdrawals you can make from your savings account to six per month. Synchrony won’t charge a fee, but could close your account if it happens too often.
What should I look out for?
While Synchrony is a highly-rated bank that’s praised in the online banking industry, there are a few drawbacks:
- No branches. Synchrony operates entirely online, meaning you can’t visit a branch to speak with a representative face to face.
- Small product selection. You won’t find the selection of financial products you might find with another online bank, like personal checking accounts or banking for your business.
- High opening deposit on CDs. CDs require a minimum deposit of at least $2,000 to open. And if you withdraw your funds before the maturity date, Synchrony charges higher fees compared to similar online-only banks, like Ally.
- Longer processing times. It may take a few days to process when you mail in a check or send and receive a wire transfer.
- Difficult cash deposits. With no ATM deposits available, you’re stuck mailing a check or money order to deposit your cash.
- Withdrawal limits. There is a daily withdrawal limit of $1,000 from ATMs and $500 for point-of-sale withdrawals.
What do regulators and customers say?
Synchrony Financial is FDIC insured, meaning that deposits up to $250,000 are protected by the FDIC if the bank fails. According to top ratings agencies S&P and Fitch, Synchrony holds a BBB- credit rating. This above-average rating means that the bank is likely to fulfill its debt obligations.Synchrony has been accredited with the Better Business Bureau (BBB) since June 2006 and holds an A+ rating. However, of the 700 reviews on its BBB page, the majority of them are negative. And over 4,500 customers have filed complaints against the bank, with problems revolving around billing and collections issues with credit cards, including unwarranted late fees, accidentally canceled credit cards and mistakes in interest charges.
Synchrony in the newsSynchrony was involved in the largest-ever credit card settlement back in 2014. When Synchrony was still known as GE Capital Retail Bank, the US Department of Justice led an investigation into the bank’s “deceptive and discriminatory practices.”
This revealed that GE Capital allegedly charging customers for credit card add-ons without the customer’s consent. It was also accused of discriminating against Latino-American customers by failing to offer several promotional credit deals to customers who had asked to receive communications in Spanish.
GE Capital ultimately reached a $225 million settlement with the US Department of Justice, paying $169 million in relief to more than 100,000 Hispanic borrowers affected by its discriminatory practices.
Bottom lineSynchrony’s low fees, high interest rates and great benefits make it perfect for those looking to hold on to more of their hard-earned money. However, it has a fairly limited product lineup and operates entirely online, so if you’re looking for a more traditional banking experience, you may be better off elsewhere.
Before deciding on the right product for you, compare your options with our guide to savings accounts.