Synchrony Bank is an FDIC-insured online financial institution offering high-interest savings products in the United States. Publicly traded on the NYSE under their parent company Synchrony Financial (SYF), their products include a High Yield Savings Account, Money Market Account, Certificates of Deposit (CDs), and IRAs. In this Synchrony Bank review, I’ll focus on the first three.
I’m going to break down the details for you, but – before I get going – I’ll throw out this little spoiler: Synchrony Bank offers one of the best online savings accounts you’ll find! You’re welcome 😉
And now this little disclaimer: Any rates and claims referenced in this review are current as of August 21, 2018. Rates, terms, and conditions are subject to change at any time and should be verified with Synchrony Bank before taking any action.
OK, let’s do this.
Synchrony Bank at a Glance
- Founded in 1988
- Parent company Synchrony Financial is traded on the New York Stock Exchange (NYSE: SYF)
- Total assets = 79.6 billion (March 31, 2018)
- Total deposits = almost 58 billion (March 31, 2018)
- Online banking available throughout the U.S.
- No physical branches
Synchrony Bank Products
- High Yield Savings Account
- Money Markets
- Term CDs (9 options)
- IRA CDs
- IRA Money Markets
Synchrony Bank Pros and Cons
|Synchrony Bank: Best Features||Where Synchrony Bank Falls Short|
|Exceptional rates on High Yield Savings Accounts||Less impressive Money Market rates|
|Impressive CD rates||$2,000 minimum deposit for CDs|
|No minimum deposit for High Yield Savings Accounts or Money Markets||Lack of a mobile app (but the website is mobile-friendly)|
|No monthly account fees||Can’t transfer to other account holders (only accounts in your own name)|
|Ability to write checks on Money Market accounts|
|No ATM fees and $5 in ATM owner-levied fees reimbursed each month, if applicable|
Who is Synchrony Bank?
Synchrony Bank was established in 1988 and was known then as Monogram Bank. It later became GE Capital Retail Bank, and – in 2014 – Synchrony Bank. When its sole physical branch in Bridgewater, New Jersey closed in February 2018, the bank became an online-only operation.
That doesn’t appear to have hurt Synchrony Bank, though. In fact, it can be argued that not having the expenses of a brick and mortar bank has been a positive development for them and their customers. Synchrony Bank has become one of the largest online-only financial institutions in the country, and they offer some very competitive rates that we’ll talk about in a minute.
Synchrony Bank Review: Savings Products
Are you considering checking out Synchrony Bank? Here is the low-down on three of their most popular savings products – the High Yield Savings Account, Money Market Account, and Certificates of Deposit (CDs).
High Yield Savings Account
Synchrony Bank offers a High Yield Savings Account with an impressive current APY of 1.85% on all balances. That’s more than 10X the national average of the Top 50 U.S. banks – which is a measly 0.17%!
There’s no minimum balance required to open the account, and you don’t need to maintain a minimum balance to enjoy the high interest rate. There are also no account opening fees or monthly charges. In this sense, the Synchrony Bank High Yield Savings Account offers great flexibility.
It’s still a savings account though, and – although you may not know this – federal regulations limit certain transactions to only six per month. This includes online transfers, overdrafts, and more. There aren’t any fees if you exceed your limit, but – if it happens more than occasionally – the bank may close your account for misuse.
Personally, I don’t see this as a big deal for a couple of reasons. First, this is a savings account. Its purpose is to save your money and earn interest. It’s not meant to be a transaction account, and using it that way diminishes its value. Second, the six transactions per month thing isn’t exactly restrictive, especially considering it excludes ATM withdrawals.
Keep in mind that Synchrony Bank doesn’t charge ATM withdrawal fees, but the owner of the ATM might. To help mitigate that, Synchrony Bank refunds up to $5 in ATM withdrawal fees per statement cycle. Not too shabby.
Money Market Account
Synchrony Bank also offers a Money Market account, but it is considerably less impressive than their High Yield Savings Account.
The Money Market Account has an APY of 1.15%. While that’s still miles ahead of many of its competitors, it’s certainly not the best rate available. For example, CIT Bank is currently offering 1.85% APY (read my CIT Bank review here). So, compared to the 1.85% APY on their own High Yield Savings, Synchrony Bank’s Money Market Account isn’t super attractive.
Like the High Yield Savings Account, there’s no minimum deposit required to open and no minimum balance required to maintain the interest rate. There are no tiered rates, so you earn the 1.15% APY regardless of balance (see table below). Like the High Yield Savings Account (and most savings accounts in general), you’re limited to 6 withdrawals per monthly cycle, excluding those at the ATM.
|Less than $5,000||1.15% APY*|
|$5,000 to $24,999||1.15% APY*|
|$25,000 and up||1.15% APY*|
|*Current as of Aug 21, 2018|
So what makes the Money Market account worth considering over the High Yield Savings Account? To be honest, I can really only think of one feature that sets it apart: You can write checks with it.
I personally don’t see this as a huge benefit since checks are kind of a dying thing. Besides, most people aren’t likely to use this as their primary checking account anyway – nor should they. However, if the ability to write checks on a savings account is important to you, I guess Synchrony Bank’s Money Market account is an option to consider.
How to Use a Money Market or High Yield Savings Account
Like I’ve mentioned before, these accounts are designed to be used as savings vehicles. They’re not meant to replace your day-to-day transaction accounts (a checking account). Similarly, they’re not ideal for long-term investment goals. Rather, they are a great place to stash savings that you want to keep liquid.
So, what do I mean by liquid? I mean accessible.
The great thing about these accounts, especially the Synchrony Bank High Yield Savings Account, is that they pay an attractive interest rate without requiring you to lock your money up for a long time (like a CD). So they’re fairly flexible, which is great if you want to build savings but aren’t sure when you might need to access it.
Here are some great uses for the Synchrony Bank High Yield Savings Account and Money Market account:
#1) Building an Emergency Fund
Everyone should have an emergency fund with enough to cover 3-6 months of living expenses. You might think that’s overkill, but being able to support yourself and your family in the event of a job loss, health issue, or other emergency is something to take seriously.
Emergency funds can also be used to cover unexpected expenses like vet bills, car trouble, etc. Trust me when I say that having a solid emergency fund makes life a lot less stressful. The High Yield Savings or Money Market Accounts are great for building an emergency fund because you’ll earn a competitive interest rate, keeping your savings separate from your general bill-paying funds, and they are 100% accessible in case you need them.
#2) Saving for a Vacation
Keeping a separate account for each of your savings goals is a great idea because it makes managing your finances super easy. Planning a dream vacation? Why not open a Synchrony Bank High Yield Savings Account specifically for that goal? Make regular deposits and watch your dream become a reality! (This applies to any savings goal, I’m just a travel junkie.)
#3) Keeping Your Eggs in Different Baskets
I’m guessing you’ve heard the expression “Don’t put all your eggs in one basket”? This is especially true when it comes to your money.
As unlikely as it might be, having your savings spread out in different accounts and at different institutions could protect you if one of your banks goes under. Remember, all of Synchrony Bank’s savings accounts are FDIC-insured up to $250,000. So, if you have more than $250,000 in savings, it’s a good idea to split it among different accounts.
Synchrony Bank Certificates of Deposit
In addition to their High Yield Savings Account and Money Market Account, Synchrony Bank offers CDs with some attractive rates, given the current rate environment.
Synchrony Bank offers CDs with 9 different terms ranging from 3 months to 5 years. The minimum deposit for all terms is $2,000. As you might expect, the longer you choose to deposit your money, the higher the rate.
In general, Synchrony Bank CD rates are higher than the average offered by the Top 50 U.S. banks. The 12-month CD with an APY of 2.45% is probably the most appealing option for the majority of people. This provides a fairly good rate but doesn’t lock you in for as long as some of the other options. See the table below for rate details for each term.
Synchrony Bank CD Rates
|Term||Rate||Minimum Opening Deposit|
|*Current as of Aug 21, 2018|
One thing to keep in mind with CDs is that there are penalties for withdrawing your money early. So, when deciding if a CD is the right savings vehicle for you, you need to consider the likelihood that you’ll need to take the money out before the end of the term.
This isn’t unique to Synchrony Bank; most CDs function this way. At Synchrony Bank, penalties apply to the amount of the principal withdrawn and shake out like this:
- Terms of 12 months or less: 90 days of simple interest
- Terms of more than 12 months but less than 48 months: 180 days of simple interest
- Terms of 48 months or more: 365 days of simple interest
There is a 10-day grace period from the time you open a CD, so if you want to make changes with no penalty, that’s the time to do it.
Benefits of Using Synchrony Bank
- Exceptional rate on the High Yield Savings Account – 1.85% APY is among the best in the biz right now.
- Attractive CD rates – The 1-year CD offers 2.45% APY, which I think strikes a good balance between rate and term length.
- No minimum deposits for High Yield Savings or Money Market accounts – This sets Synchrony Bank apart from some of their competitors and definitely makes getting started easy.
- No fees – There are no fees to open accounts, no monthly maintenance fees, and online banking is free. Although Synchrony Bank doesn’t charge a fee to withdraw at an ATM, the owner might. To mitigate this, Synchrony Bank will reimburse its customers up to $5 in ATM fees per monthly cycle.
- You can write checks on your Money Market Account – If the ability to write checks matters to you, the Money Market Account has you covered. Just contact Synchrony Bank and request some checks.
- Synchrony Bank Perks Program – Synchrony Bank offers its customers automatic membership in their Perks Program based on their balance and tenure with the bank. There are five tiers, and the benefits (things like travel discounts and rate specials) increase with each subsequent tier. Learn more about Synchrony Bank Perks and the tiers here.
Where Synchrony Bank Falls Short
Compared to the big banks, Synchrony Bank’s interest rates are a no-brainer. However, we also need to consider how it compares to its smaller online competitors as well.
Although the High Yield Savings Account and CDs offer very competitive rates, APY on the Money Market isn’t so hot. So, if you prefer a money market to a savings account, I’d check out CIT Bank for a money market account over Synchrony Bank.
If you’re considering the CDs, be aware that the minimum deposit for any term is $2,000. This is higher than some competitors require and may be a barrier for some.
At this point in time, there’s no Synchrony Bank mobile app. There is an online banking website that’s mobile-friendly, though, so you can access it on your phone with no problem. Still, that might not appeal to those who prefer using banking apps.
I contacted Synchrony Bank to ask a few questions about the online capability, and I discovered you can only transfer to accounts in your own name. Like I keep saying, the High Yield Savings and Money Market Accounts are for saving, so you shouldn’t use them like your regular checking accounts anyway. That being said, some might find this too restrictive.
Is Synchrony Bank Right for You?
If you’re comfortable with an online-only banking solution that focuses on savings rather than transaction accounts, then I’d say Synchrony Bank is an excellent option for you to consider.
In particular, I recommend the High Yield Savings Account. At 1.85% APY and no minimum deposit required, it’s one of the most attractive deals on the market right now. The CDs also boast some great rates, if you can get on board with the $2,000 minimum deposit. The 12-month CD at 2.45% APY is an especially appealing option. It’s a very solid rate without requiring a ridiculously long time commitment.
If, on the other hand, you’re more comfortable with face-to-face service, an exclusively online bank is not going to work for you. Similarly, if you’re looking for a bank to meet all your needs (checking, savings, investing, borrowing, etc.), Synchrony Bank isn’t it. That being said, Synchrony Bank’s parent company – Synchrony Financial – does offer a more comprehensive suite of services.
How to Open a Synchrony Bank Account
You can open a Synchrony Bank account online here. Here’s what you’ll need to get started:
- Either a Social Security Number or a U.S. Tax Identification number
- A government issued ID, meaning a U.S. driver’s license, a military ID, or a state-issued identification number
- Your address, employment info, and the source of the funds you’re using to open your account
Once your account is open, you’ll also need to fund it. You can do that in the following ways:
- Transfer from an external registered account (this is an account in your name at another financial institution – you provide Synchrony Bank the details)
- Transfer from an existing Synchrony Bank account
- Mobile check deposit using the online banking website on a smartphone
- Mail in a check
- Send a wire transfer from another account
For most people, it’s probably easiest just to transfer your funds from another account, but it’s nice to have these options.
Synchrony Bank Review: The Bottom Line
Here’s the bottom line: Synchrony Bank is an excellent option for anyone seeking online savings options with competitive interest rates. In particular, I recommend the High Yield Savings Account for its stellar 1.85% APY with no minimum deposit.
The CD rates are also good, but some may find the $2,000 minimum deposit a bit hard to swallow. The Money Market Accounts offer checks and no minimum deposit but don’t offer as good of a rate as many other banks.
Thanks so much for reading, and good luck!
Have you tried any of Synchrony Bank’s products? What’s your take? Let us know in the comments.