Business_news As a small business owner, there are 3 reasons I’m keeping my Amex high-yield savings account even though interest ratings have dropped dramatically


The author, Nicole Pomije.

Courtesy Nicole Pomije

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, but our reporting and recommendations are always independent and objective.

  • I’ve been growing my bakery business for the last few years and haven’t been able to save much money.
  • At the beginning of 2020, I was finally in a position to save, so I openeda high-yield savings account with Amex(Member FDIC).
  • But six months on, my interest rate is down a full 1%. Still, I’m keeping the account since I’m earning more than I would in a typical bank savings account and my cash is accessible if I need it.
  • See business Insider’s picks for the best high-yield savings accounts »

As most entrepreneurs will tell you, saving money is almost impossible while you are building a business from the ground up. You tend to need any extra funds for business expenses, to keep afloat as well as grow and hire employees and purchase more inventory.

Over the past few years, instead of saving, I’ve been investing any extra funds into building my bakery,The Cookie Cups. This year, however, I made it my goal to put some of my hard-earned money in the bank for the long term. I also wanted to make sure it would grow, since typical savings accounts only earn about 0.01%.

Business_news Searching for the right high-yield savings account

I started my Google search with something like “best high-yield savings accounts,” and it took me to an article with a great list of options. I decided toopen an account with American Express. I already have an Amex credit card, so I felt a sense of trust in the company. And at the time, Amex was listed in the top three with an interest rate of about 1.89%, compounded daily.

At first, I had very high expectations for my 2020 savings — I figured this account would allow me to make a few thousand dollars just by letting my savings sit there. In July, however, I received notice that the interest rate was dropping to 0.99% because of theFed’s pandemic-related interest rate cut, and a few weeks ago there was another email with another interest rate of 0.8%, which is almost 1% less than when I opened this account just under six months ago. 

  • Details
  • Pros & Cons

    • FDIC Insured
    • 24/7 account access
    • Earns interest daily, and posts to account monthly
    • Competitive APY
    • No monthly service fees
    • No opening deposit or minimum account balance
    • 24/7 phone support
    • No excess transaction fee
    • No mobile app for banking customers
    • You must make a deposit within the first 60 days
    • No live online chat

    Read Our Review

    Read Our Review
    A looong arrow, pointing right

    Business_news Why I’m keeping my account open despite interest rates dropping

    For a second, I debated pulling my funds to put them somewhere where I might earn more interest over time, like a retirement account oreven a CD, but those accounts tend to require that you keep the funds in them for a long period of time. As an entrepreneur with a growing business, I have found that surprises happen (especially now with COVID-19) and there may be times when I need quick funds to help with payroll or other business expenses that we’d normally be able to cover.

    I decided to keep myAmex savings accountfor three reasons:

    1. Liquidity:My funds will be available if I need them, even if they are earning less than they might in another account.
    2. Higher interest rate than traditional savings:Even though my interest rate has dropped, I’m still earning much more than I would in a typical bank savings account.
    3. Compound interest:Compound interest allows me to make money on my earned interest. A higher interest rate means more cash earned.

    Myhigh-yield savings accountalso allows me to make a certain number of withdrawals without penalty while keeping my funds liquid in case of emergencies, so I’m holding onto it. 

    If you’re thinking of opening a savings account this year, I would definitely consider opening something with a high yield so that you are making the most of your funds with the ability to access cash quickly if needed. 

    Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

    Something is loading.


    High-Yield Savings
    Savings Account
    American Express
    American Express high-yield savings

    Chevron icon
    It indicates an expandable section or menu, or sometimes previous / next navigation options.

    Read More