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In recent years, Amex has expanded its services to personal banking.
In this article, we'll guide you through the simple steps to get started with an Amex CD account. Don't worry if you're not familiar with financial jargon – we'll break it down in everyday language so you can confidently navigate the process.
1. Launch Your CD Application
To open an Amex CD account, Here's what you need to know:
Eligibility: You must be 18 years or older, a U.S. citizen or resident alien with a valid SSN or ITIN, and have a U.S. home address. The account is for personal use only.
Existing Amex Customers: If you're already an Amex customer, indicate whether you're a current Card Member or only have a CD Account.
New Customers: If you're not an Amex customer, select the option to open a new CD Account.
2. Select CD Term
The next step in opening an Amex CD account is to choose the CD term, which refers to the duration or length of time you want to invest your money.
Amex offers different terms between 6 to 60 months, but you'll get competitive rates only on some of them, so make sure to review each term separately.
Consider your financial goals and timeline when selecting the CD term. Longer-term options generally offer higher interest rates but require a longer commitment. Shorter-term options provide flexibility if you need access to your funds sooner. Choose the term that aligns with your financial needs and preferences.
3. Joint Or Single Account?
Now, you will be asked whether you want to have a joint account or an individual account. Here's what you need to know about this step:
Individual Account: If you select “No, just me on this account,” it means you want to open the CD account in your name only. You will be the sole owner of the account, and no other person will have joint ownership or access to the funds.
Joint Account: If you select “Yes, add another person,” it means you want to share ownership of the CD account with another individual. This could be a family member, spouse, or anyone you choose. Both account holders will have equal ownership rights and access to the funds in the joint account.
4. Personal And Contact Details
You'll need to provide your personal information and contact details. Here's what you need to do:
Personal Information: Enter your first name, middle name (optional), last name, and suffix (optional). Provide your date of birth and either your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
Contact Information: Give your email address, phone number, physical address, city, zip code, and select the phone type (mobile, home, work).
Communication Method: Choose whether you want to receive bank statements and account notifications electronically only or in both electronic and paper formats.
5. W-9 Tax Withholding Status Certification
Similar to the Amex savings account opening, there is a step regarding the W-9 Tax Withholding Status Certification. This step is required by the IRS (Internal Revenue Service) to confirm customers' tax status, particularly for interest-earning accounts. Here's what you need to know:
You will be asked whether you have received a notification from the IRS stating that you are subject to backup withholding.
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6. Approve Terms & Conditions
In this step, you will review the Terms & Conditions for your Amex CD account. Here's a summary:
CD Details: You will find information about the CD, including the Annual Percentage Yield (APY), Interest Rate, and Term (duration).
Account Disclosures: You will be asked to review important documents:
- Deposit Account Agreement
- GLBA Privacy Notice
- Electronic Consent Statement
Certification: You will confirm that the information provided is accurate and agree to all the Terms and Conditions by clicking “Submit.”
By reviewing and accepting these terms, you understand the CD account details, privacy policies, and your responsibilities as an account holder.
7. Add Money To Your Account (Optional)
During the account setup process for your Amex CD, you will be prompted to add money to your new CD account. Here's what you need to know about this step:
Bank Account Type: You will need to specify whether the account you will link is a checking or savings account. This is the account from which you will transfer funds to your Amex CD account.
Routing Number: You will be asked to provide the routing number of your bank. This nine-digit number identifies the financial institution where your bank account is held.
Account Number: Enter the account number associated with your bank account. This unique number identifies your specific bank account within the financial institution.
Deposit Amount: Specify the amount of money you want to deposit into your Amex savings account. You can enter the desired amount in dollars.
You will have the option to confirm the connection between your Amex savings account and your bank account. If you prefer to complete the bank connection step later, you can choose to skip it for now.
Review Amex CD Rates And Early Withdrawal Penalty
If you withdraw money from your American Express Bank CD before it matures, there will be an early withdrawal penalty. The penalty amount depends on how long you've held the CD. The penalty is measured in terms of the number of days' worth of interest.
The longer you had the CD, the more interest you'll have to pay as a penalty. The penalty period can range from 90 days to 540 days, depending on the CD term you choose.
Here are the current rates and early withdrawal penalties:
CD Term | APY | Early Withdrawal Penalty |
|---|---|---|
12 Months | 4.35% | 270 days interest |
18 Months | 3.25%
| 270 days interest |
24 Months | 4.00% | 270 days interest |
36 Months | 3.00% | 270 days interest |
48 Months | 3.00% | 365 days interest |
60 Months | 3.00% | 540 days interest |
FAQs
What is the Maturity Date and what happens after that?
The Maturity Date refers to the date when your CD reaches the end of its term. After the Maturity Date, there is a 10-day grace period during which you can withdraw funds from your CD account without any penalty or make a deposit to increase the principal amount.
If you want to prevent automatic renewal, you can note American Express before the maturity date or within the grace period to change the maturity option or request non-renewal.
How is interest calculated on American Express Bank CDs?
Interest on American Express Bank CDs is calculated by compounding it daily and then depositing it into your account on a monthly basis. You can withdraw the interest payments without any penalty, but the overall interest rate is calculated based on leaving the interest in the account to earn further interest.
Do American Express Bank CDs have a no-penalty option?
No, currently American Express Bank does not offer a no-penalty CD option.
