Many banks extend their account options to online-only accounts — some with higher interest rates and lower fees than you’ll find with your local branch. So how should you choose an account that fits your needs?
We take a look at one online savings account option from Barclays Bank, one of the 50 largest banks in the world.
What is Barclays Bank known for?
Barclays is a multinational bank headquartered in London. It offers corporate and personal banking solutions with a range of available products, including bank accounts, personal loans, mortgages and insurance.
What are the benefits of a savings account with Barclays?
Barclays’ online savings account offers a handful of key features that can help you save.
- High 1.4% APY. Barclays savings account APY is 14 times the national average for other online savings accounts.
- No maintenance fees. You’ll pay no monthly fees with this account.
- No deposit. Open your Barclays online savings account with any amount.
- No maximum balance. Hold as much as you can save in your Barclays account.
What is the difference between an interest rate and an APY?
Your interest rate is the simple interest you’re paid on an account or an investment over the period of a year. For example, if you’ve invested $1,000 into an account that comes with 1% interest, you’ll have earned $10 on that investment at the end of a year.
The annual percentage yield is a bit trickier. An APY is an effective annual rate of return that takes into account the effect of compounding interest over a year. In short, it’s the interest rate compounded monthly over the course of a year.
What should I look out for?
The Barclays online savings account has several beneficial features, but you’ll want to keep a few factors in mind.
- Excessive transaction fee. Like most online-only savings accounts, you’re limited to six withdrawal transactions monthly. After that, you’ll pay $5 for each transaction in that same month.
- No cash deposits. You must electronically deposit funds into your Barclays online savings account.
- No cash withdrawals. Interactions are limited to electronic fund transfers among linked accounts.
- Five-day hold on deposits. All deposited funds are held for five business days from the day on which you make the deposit and your account is credited.
Compare Barclays Bank to other savings accounts
What does the Internet say about Barclays Bank?
Barclays Bank received an F rating by the Better Business Bureau and was flagged for being involved in a civil suit with the US Department of Justice (DOJ).
In 2016, the US DOJ sued Barclays for its sale of toxic mortgage bonds that helped spur the financial crisis back in 2008. In October of 2017, Barclays asked a federal judge to dismiss the case, but the government opposed the request, stating that there was little doubt that the bank perpetrated “a massive and coordinated fraud” that led to the loss of billions of dollars to investors.
Moreover, Barclays Bank received a one star rating on Trustpilot, with most customers complaining about their poor customer service.
How do I sign up?
- Go to the Barclays Bank website and click on “Open an Account”.
- Provide your name and email to set up your account.
- Choose an opening deposit.
- Link your bank account and provide the required information to complete your signup.
What information is required?
- Social Security Number
- The banking details of the account you want to use to fund your new Barclays account — including name, routing and account number
- If you are opening a joint account, the joint account holder you wish to open with needs to be present to apply.
What other savings options does Barclays offer?
Barclays offers two additional savings options:
- Barclays Dream Account. An online savings account with a 1.4% APY, a 1.14% interest rate and a maximum deposit limit of $1,000 per month. Deposit funds for six consecutive months to receive a 2.5% bonus applied to the past six months of interest accrued.
- Barclays Online CD. A CD with high fixed interest rates, terms ranging from three to 10 months and APYs of 0.35% to 2.30%.
The world’s first ATM
Barclays Bank in Enfield unveiled the world’s first ATM on June 27, 1967 — which means the ATM is now 50 years old! The historic machine allowed withdrawals of £10 at a time.
The Barclays online savings account’s APY has a competitive 1.4% and an interest rate of 1.14% but lacks cash deposit and withdrawal features.
If you’re looking for the convenience of an online savings account and are willing to conduct all transactions online, the Barclays online savings account could be a sensible option.
Click here to find more savings account options to consider before making your decision.