A savings account is probably the first bank account you ever opened, most likely as a child or a teenager. Maybe your parents opened an account for you at a local bank or credit union, and throughout the years you chose to maintain a relationship with this financial institution.
There’s nothing wrong with being loyal to a particular bank. However, as you become older, a traditional savings account might no longer meet your financial needs, especially in an increasingly digital world.
You don’t have to let go of your traditional savings account, but it can pay to explore other savings options, such as the online savings account from Barclays Bank Delaware.
Barclays Online Savings Features
An online savings account is an account that’s funded and managed entirely on the internet. For the most part, these accounts function like any other type of savings account. They help you meet short- and long-term financial goals, such as saving for retirement, paying for a child’s education or perhaps buying a house. But unlike a traditional savings account, online accounts tend to pay off more in the form of interest.
“Online banks typically offer the most competitive savings rates,” said Matt Cosgriff, certified financial planner with Lifewise Advisors. “That’s typically what we recommend to clients — to try to find one of those online banks, whether it’s Barclays or Ally Bank.”
The Barclays Online Savings, in particular, offers a savings account rate of APY — compare that with the average savings account interest rate of 0.06% APY.
The account’s higher-than-average interest rate isn’t its only perk, however. Here are some of the features that come with the Barclays Online Savings Account:
- No monthly maintenance fees
- No minimum balances to open
- Direct deposit availability
- Online banking availability
- Online savings tools and resources
Barclays Online Savings: Pros and Cons
With every online savings account, there will always be some positives as well as negatives. For this Barclays savings account, let’s start with the positives.
Pros of Opening a Barclays Online Savings
The Barclays Online Savings Account made it onto GOBankingRates’ ranking of the 10 best savings accounts of 2016, partly because it boasts one of the best savings account rates in the study. In addition to its rate, this savings account offers other benefits that can help you save money faster:
- No monthly maintenance fee: Some banks require customers to pay $3 to $20 or more each month to maintain a savings account. Or, they might waive the fee if the account holder meets certain requirements, like maintaining a balance of $300 or more each day. Barclays won’t charge you a cent — no matter what.
- No minimum balance requirement to open: Unlike some banks, Barclays doesn’t require that you deposit a large sum of cash in order to open an account.
- Online savings tools: If you need help saving money for a particular goal, Barclays offers a “Savings Assistant” tool on its website. By entering your goal, how much it costs, how much you’ve already saved up and how much you can contribute monthly, you can easily calculate how long it will take to reach your goal.
- You can have a total of 25 accounts: If you want a savings account for each savings goal, you could do that with Barclays. The bank allows customers to open and maintain any combination of 25 total accounts, which means you can also open a CD account with the bank.
- FDIC Insurance: Your money in a Barclays savings account is safe and insured by the FDIC.
Cons of Opening a Barclays Online Savings
The Barclays Online Savings Account looks pretty good on paper. But before you open an account, make sure you read the fine print — you might find some cons that you won’t like:
- Minimum required to earn interest: Although the account doesn’t require an initial deposit, you must maintain a minimum balance in order to earn interest on your account. The good news? Your minimum balance only needs to be high enough so that you’ll earn at least $0.01 within the statement cycle. Furthermore, if your balance is less than $1 for a period of 180 days or more, the bank can close the account.
- Unpredictable rates: Unlike its CD accounts that offer fixed rates, Barclays savings account rates are subject to change. So if you sign up for the Online Savings Account today, there’s a chance the rate will drop tomorrow. This, however, is typically standard across many savings accounts.
- Maximum of 6 withdrawals: If you’re the type who always withdraws money, keep in mind that you can only make up to six withdrawals from your Barclays Online Savings Account per statement cycle. This rule, however, is pretty standard across most savings accounts.
- Limited banking options: Unlike a major bank, Barclays Bank US does not offer a wide array of products such as checking accounts, mortgage loans and auto loans. Your only options are savings accounts and CDs.
Current and Typical Savings Account Rates
Barclays Online Savings Account’s interest rate of APY is pretty impressive, but it’s not the highest rate out there. Still, it’s better than many other savings account rates offered by different banks.
Here’s a look at other banks’ savings account rates:
|Bank + Account Name||Savings Account Rate (APY)|
|Ally Bank Online Savings Account||0.00%|
|Bank5 Connect High-Interest Savings Account||0.90%|
|Bank of America Regular Savings Account||0.01%|
|Bank of Internet USA High Yield Savings Account||0.61%|
|Barclays Online Savings|
|Capital One 360 Savings||0.65%|
|Discover Bank Online Savings Account||0.95%|
|GE Capital Online Savings||1.05%|
|First Internet Bank Regular Savings||0.60%|
|MySavings Direct High Interest Savings Account||1.00%|
|State Farm Savings Account||0.10%-0.30%|
|Synchrony Bank High Yield Savings||0.75%|
|U.S. Bank Standard Savings||0.01%|
|Wells Fargo Platinum Savings Account||0.01%-0.06%|
Barclays Online Savings Fees
Although Barclays Online Saving doesn’t come with monthly fees, there are other fees you should be aware of:
|Type of Fee||Fee Amount|
|Monthly Maintenance Fee||$0|
|Excessive Transaction Charge||6 free, then $5 for each withdrawal or transfer thereafter|
|Stop Payment Fee||$0|
|Official Check (Cashier’s Check)||$5|
|Non-Sufficient Funds (NSF) Fee||$5 per item|
|Returned Deposit Items||$5 per item. Not to exceed $50 per business day.|
|Statement Copy||$0.50 per statement|
Barclays Online Savings vs. Other Online Savings Accounts
Though the Barclays Online Savings can help you save and grow your money, you’ll want to make sure you’re not missing out on other savings opportunities.
The following table shows similar online savings accounts and indicates the accounts’ APYs, whether there are monthly maintenance fees and whether there are minimum deposit requirements that must be met in order to open an account:
|Bank Name||Online Savings Account Name||APY||Monthly Fees||Minimum Deposit Requirement to Open|
|Online Savings Account||0.80%||None||None|
|High-Interest Savings Account||0.90%||None||$10|
|High Yield Savings||0.61%||None||$100|
|Online Savings Account||None||None|
|High Yield Savings||1.00%||None||$100|
|High Yield Savings||0.70%||None||$100|
|High Yield Savings Account||0.75%||$5*||$30|
*Monthly fee can be waived if certain requirements are met.
As you can see, a majority of the online savings accounts listed above require a minimum opening deposit. And besides Barclays, there are only two online savings accounts that don’t charge monthly fees and don’t require a minimum opening deposit: Ally Bank, which also made the 10 best savings accounts of 2016 list, and GE Capital Bank.
Ally Bank’s Online Savings account is nearly identical to the Barclays Online Savings account. Like Barclays, Ally Bank boasts an impressive 0.80% APY, and the interest is compounded daily. But when it comes to other fees, these two online savings accounts slightly differ.
For example, Barclays Online Savings Account charges $5 for an official check, which is commonly known as a cashier’s check. Ally Bank doesn’t charge anything for cashier’s checks. But, Ally Bank charges more for a returned deposit item ($7.50) compared with Barclays ($5).
GE Capital Bank’s Online Savings account is similar to Barclays’ savings account as well. GE Capital Bank, however, offers a slightly higher interest rate of 1.05% APY. That 0.05 percent can make a small but significant difference over time.
Let’s say you want to put $5,000 in a savings account. If you put your money in the Barclays Online Savings, you will have about $5,523 after 10 years. But if you put your money in GE Capital Bank’s Online Savings account, your total balance will be $5,550 after 10 years. It’s only a $27 difference, but every penny counts when you’re trying to reach a savings goal.
Is the Barclays Online Savings Right for You?
If you love the sound of no monthly maintenance fees while you earn interest on your savings, the Barclays Online Savings could be right for you. Plus, doing business with this online bank might compel you to use its other impressive products, such as its online certificates of deposit (CDs). Like with its savings account, Barclays offers a higher-than-average rate on its 60-month CD: APY versus the national average of 0.80% APY.
But perhaps you prefer banking with a financial institution that has physical branches in your surrounding area. If that’s the case, you’ll want to choose a traditional savings account from a brick-and-mortar bank. You’ll have 24/7 access to your funds if you bank with Barclay, but if you prefer speaking to someone face-to-face instead of over the phone, a bank like Bank of America or Chase Bank might be a better option for you.
How to Open a Barclays Online Savings
Opening an Online Savings Account with Barclays is easy. First, make sure you have the following information and documents:
- Social Security number
- External bank name, routing and account number
Next, follow these four steps:
Step 1: Visit the Barclays’ Online Savings page
Step 2: Click “Open an Account”
Step 3: Provide your first and last name, email address and primary phone number. Then, click “Continue.”
Step 4: Indicate whether you’ll be opening a single or joint account, pick “Online Savings” in “Account Type” and indicate how much you want to deposit initially.
After that, you’ll just have to provide a few more details about yourself, create a User ID and password, and link a separate bank account to fund your initial deposit. Once that’s set up, you’re ready to start saving with the Barclays Online Savings Account.
Valencia Higuera contributed to the reporting of this article.
Ally Bank, Barclays Bank Delaware, Capital One, Chase and Synchrony rates are accurate as of today. All other rates are current as of Jan. 13, 2016 and are subject to change at the banks’ discretion. Some banks mentioned in this article might be GOBankingRates clients.
Editorial Note: This content is not provided or commissioned by the bank advertiser. Opinions expressed here are author’s alone, not those of the bank advertiser, and have not been reviewed, approved or otherwise endorsed by the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program.