Barclays Online Savings Account Review: Solid APY and No Monthly Fees
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This Barclays Online Savings review will explain how the account works, the best ways to use it, and if it can work for your financial goals. Enjoy!
When it comes to saving money, I want to get the most bang for my buck. Online savings accounts tend to pay much higher interest rates, which is why I like them so much. After all, earning a tiny amount of interest with a traditional savings account makes little sense when other banks pay much higher rates.
Luckily, the banking industry is booming right now, with competitive options to help you earn more interest, and Barclays Online Savings is no exception.
While there are many online savings options out there, Barclays Online Savings sets itself apart by offering a 1.70% annual percentage yield (APY), no monthly maintenance fees, and built-in tools to help you save more money.
Are you ready to earn a consistent return on your money without any risk? Let’s see if Barclays Online Savings lines up with your financial goals. Let’s go!
At a Glance: Barclays Online Savings Account
- Earn 1.70% APY
- No monthly maintenance fees
- No minimum opening deposit
- Nominal $5 non-sufficient funds fee
- Remote check deposits
- 24/7 access to customer service
- Easy-to-use mobile app
(Rates current as of December 23, 2019)
What Is the Barclays Online Savings Account?
Barclays got its start in London in 1690, which means the banking institution has been around longer than the United States has been. The bank has grown to be a respected institution around the globe, and as of 2018, it provides services to over 24 million customers and clients in 40 different countries.
Although it’s been operating in the U.K. for more than 325 years, Barclays didn’t come to the United States until 1965, and it launched its online savings accounts and certificates of deposit (CDs) in 2012.
The American arm of the business falls under Barclays Bank Online. Since it’s headquartered in the U.S., there’s no need to worry about currency conversion or complicated tax scenarios you’d see if you had an account at a foreign bank. Barclays Online Savings is 100 percent U.S. currency.
Like a traditional bank with a physical location, your deposits are covered by FDIC insurance up to $250,000.
The savings account is a great tool to have in your financial toolbox. And for longer term savings, you might consider a CD from Barclays. It could help you get a higher return on your money, depending on the term length you choose.
For instance, a three-month CD is far below what you’d earn with the online savings account. However, you’d earn 2.00% APY if you invest in the 12-month option.
How Barclays Works
The company focuses its strategy on building long-term relationships, providing advanced uses of technology, and creating personalized experiences. Its online savings account delivers on these principles.
Barclays’ web portal has a user-friendly interface and its mobile app is second to none.
The “deposit checks” feature allows you to deposit money into your account by uploading a photo of the check from your smartphone, desktop computer, or laptop.
Minors can open accounts to build their savings from a young age. Anyone under the age of 18 can have their own username and password to access the account. When logged in, minors can deposit checks and view account activity. They aren’t able to make withdrawals from the account — an adult who is a joint account holder is the only one allowed to take out funds.
Since it’s an online bank account, it’s not associated with any branches or options for in-person banking in the U.S. But a lot of high-yield savings accounts are products of online-only banks, so not having a physical location isn’t out of the ordinary.
If you’re looking for an easy way to earn interest with rates among the highest out there, you’ll find it here.
The online savings account from Barclays pays 1.70% APY, making it one of the top-paying savings accounts nationwide. For comparison, banking giant Chase Bank pays just 0.01% APY.
Keep in mind this product is a savings account, which means it’s subject to only six monthly transfers or withdrawals. This isn’t the bank’s fault, though. Federal law puts this restriction on all savings accounts, so you’ll have to deal with this limit wherever you do your banking.
While there are no maintenance fees, Barclays will likely charge you a fee for going over the six-withdrawal limit. Another fee you might end up paying is for non-sufficient funds if you overdraw your account. But at just $5, the amount isn’t huge. In fact, this is one of the lowest non-sufficient funds fees we’ve seen.
What I Love About the Barclays Online Savings Account
One of the best features of Barclays is earning 1.70% APY. You won’t find that high rate at traditional banks and that alone is an excellent reason to look into this account.
Aside from the great interest, what I love most about online savings accounts is that keeping my money in them curbs my tendency for impulse purchases. When you save money, you’re supposed to leave it there until you reach your goal, right? While that makes sense, the trouble is that saving money isn’t easy.
Even though I have huge financial goals, I’m tempted to spend my savings more often than I like to admit. But I have learned the secret to keeping my money in savings where it belongs: Set up a savings account at a different bank than the one you use for everyday spending.
It sounds complicated, but the idea is simple. It’s also the reason I think the savings account from Barclays is so great.
Let’s say you have a checking account at a regular bank. Your bank makes transferring money between accounts easy. With a simple click of a button, moving cash from your savings to your checking only takes a few seconds.
With cash available whenever you want it, you can spend it without much thought.
But if you keep all of your savings at a different bank, you have to stop and think before you can access your funds. It requires a deliberate decision to spend the money so you’re less likely to use it for something other than your savings goal.
Because the transfer can take one to three days, you must make a conscious effort to move cash from your online savings before you can withdraw it. This minor delay creates a little bit of awareness that can help curb your spending.
Where the Account Falls Short
Barclays Online Savings Account is pretty great. It doesn’t charge monthly maintenance fees, and there’s no minimum deposit to open an account. That means anyone can tap into the wealth-building power of this high-yield savings account.
However, one of the downsides is not having ATM access. While this helps to ensure your cash stays tucked away, some people like to do their banking in-person and need ATM access.
But if you’re okay with trading the ease of withdrawing your money at an ATM for a super-high interest rate, the Barclays account is where it’s at.
How to Use the Barclays Online Savings Account
- Sinking Funds: Stashing your cash in an online savings account can help you reach any savings goal, no matter how big or small. A sinking fund can be used to save up for a $600 television for the family room or to pay for your yearly subscription to Amazon Prime. Transfer a small amount of money to the fund each month, and you’ll have no trouble paying for it when the time comes.
- Cash for Emergencies: An emergency fund is one of the most common uses of an online savings account. Whether you have a “baby” emergency fund of $1,000 or a fully funded one, it makes sense that you’d want to earn a bigger return in a high-yield savings account. Having $15,000 in emergency savings will earn you almost $300 a year in interest at Barclays. And who would say no to free money?
- Vacation Savings: Travel can create lasting memories, but the costs can add up. Instead of relying on a credit card (or worse, a vacation loan), create a vacation fund by setting aside a little money each week to pay for your next excursion. Soon you’ll have enough for that beach vacation or a trip to Europe to see Rome, Paris, and London.
- Save for a House: Buying a house can end up costing more upfront than you think. Aside from the down payment, you’ll also pay closing costs and fees for various inspections. CNBC reports that saving for a median-price house takes an average of 6.5 years for renters in the United States. Using an online savings account is perfect for this financial goal. Plus, the higher interest rate will build your savings quicker.
Barclays Online Savings: The Verdict
Barclays Online Savings simplifies the process of saving money. Anyone can open an account since it doesn’t require a minimum deposit. Plus, there’s no waiting period to earn a big return on your money.
The mobile app and online banking portal are simple to use and transferring money to and from other banks is a breeze.
With Barclays, you can put savings on autopilot by setting up a direct deposit. You’ll be surprised how quickly you reach your goals when you create a “set it and forget it” style plan to build your savings account.
If you like to do your banking in person, this might not be the bank for you, since Barclays doesn’t have branch locations in the U.S. But this online savings account is perfect if you’re looking for a straightforward way to increase the interest you earn on your savings. Not only will you get a great rate of 1.70% APY to help your money grow faster, but you’ll also save money by not having to pay monthly maintenance fees or service charges.
Do you have an online savings account? What do you use it for?
Barclays Online Savings Account
Commissions and Fees
Ease of Use
Barclays Online Savings
When it comes to high-yield savings accounts, Barclays Online Savings is a very solid option. Offering a good rate and no monthly fees, this account is a very good place to stash cash for things like travel, emergencies, and other specific savings goals.
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