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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.
Kelly Waggoner is editor-in-chief of Finder US. She's worked with publishers, magazines and nonprofits throughout New York City, including ghostwriting a how-to on copyediting for the Dummies series. Between projects, she toys with words, flips through style guides and fantasizes about the serial comma's world domination.
What are the benefits of a savings account with Barclays?
The Barclays Online Savings Account offers a handful of key features that can help you save.
High 2% APY. The annual percentage yield on the Barclays Online Savings Account is 20 times the national average for other online savings accounts.
No maintenance fees. You’ll pay no monthly fees with this account.
No minimum 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 a year. For example, if you’ve invested $1,000 into an account 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 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 all online-only savings accounts, you’re limited to six withdrawal transactions monthly. But with Barclay savings, you’ll pay $5 for each transaction that exceeds the six 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 you make the deposit and your account is credited.
Case study: Michael’s experience
Michael Koh Data Analyst
One of the first things I looked into when I started my career was a high-interest savings account. I ended up going with Barclays because of their name recognition and mostly glowing reviews on Reddit. I’ve had to call them a couple of times and found their customer service to be helpful and courteous.
Security is extremely important to me and Barclays does a thorough job with that, offering two-factor authentication and Touch ID on their mobile app. Speaking of the app, it makes transferring money between accounts a breeze, and you can set up multiple savings accounts under your primary Barclays account. The fact that their APY has doubled in the past year doesn’t hurt either.
Compare Barclays Bank to other savings accounts
How do I open an account?
Go to the Barclays Bank website and click on Open an Account.
Enter your full name, Social Security number, date of birth, email address and home address to set up your account.
Choose an opening deposit.
Link your bank account and provide the required information to complete your signup.
We analyze top savings accounts and rate them one to five stars based on factors that are most important to you. These factors include: interest rates, monthly fees, minimum deposits, customer service and account features.
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