What American Express Offers as a Certificate of Deposit

American Express offers a Certificate of Deposit (CD) through its online banking platform, AmEx Personal Savings. A CD is a savings account where you agree to leave money untouched for a set period — typically three months to five years — in exchange for a fixed interest rate that is usually higher than a regular savings account.

American Express CDs are FDIC-insured up to $250,000 per depositor, per institution, which means your money is protected by federal insurance if the bank fails. You fund the CD with a one-time deposit, and at the end of the term (called the maturity date), you get back your original deposit plus the interest earned.

The main trade-off is access: if you withdraw money before the maturity date, American Express charges an early withdrawal penalty. The penalty amount depends on the CD term length you chose. Shorter-term CDs (three to six months) typically have smaller penalties; longer-term CDs (three to five years) have larger ones.

Key Takeaways

  • American Express CDs require you to lock money away for a fixed period in exchange for a may provide interest rate that does not change.
  • You can open an American Express CD online through its website or mobile app, and you fund it with a single deposit from a bank account you own.
  • If you withdraw money before the maturity date, you pay an early withdrawal penalty that reduces your earnings or principal.
  • Interest rates and penalty amounts vary based on the CD term length, so comparing the terms before you deposit is important.
  • Your deposit is FDIC-insured up to $250,000, so your money is protected even if American Express fails.

Interest Rates and How They Compare

American Express publishes its CD interest rates on its website, and the rates change based on market conditions and the term length you choose. Shorter terms (three to six months) typically offer lower rates; longer terms (one to five years) offer higher rates. The rate you receive is locked in on the day you open the CD and does not change for the entire term.

Interest rates at American Express CDs vary from month to month and sometimes week to week, so the rate available today may not be the same next week. To see current rates, you visit the American Express website directly. You can also compare American Express rates to other online banks — many comparison sites list CD rates across multiple institutions side by side.

Interest is compounded daily and paid into your CD account. When your CD matures, you can withdraw the full balance (principal plus interest), roll it into a new CD at the current rate, or transfer it to another account.

How to Open an American Express CD

You open an American Express CD entirely online through the American Express website or mobile app. You will need a valid Social Security number, a U.S. mailing address, and a bank account in your name to fund the CD. The process takes about 10 to 15 minutes.

First, log into your American Express account or create one if you do not have one. Navigate to the savings or CD section and select the term length you want (three months, six months, one year, two years, three years, or five years). American Express will show you the interest rate for that term. Enter the amount you want to deposit — there is typically a minimum deposit requirement, which varies by term.

Next, choose the bank account you want to fund the CD from. American Express will verify the account by sending small test deposits (usually under $1 each) to that account. You confirm the amounts in your bank's system, which typically takes one to two business days. Once verified, the full CD deposit is transferred from your bank account to American Express.

You receive a confirmation email with your CD details: the deposit amount, interest rate, maturity date, and early withdrawal penalty. Mark your calendar for the maturity date so you know when your money becomes available without penalty.

Early Withdrawal Penalties and What They Cost

American Express charges an early withdrawal penalty if you take money out before the maturity date. The penalty is a certain number of months' worth of interest, and the number depends on the CD term you chose. For example, a three-month CD might have a penalty equal to one month of interest; a five-year CD might have a penalty equal to 18 months of interest.

The penalty is deducted from your interest earnings first. If you have earned more interest than the penalty amount, you lose some of your earnings but keep your full principal. If you have not earned enough interest yet to cover the penalty, the difference comes out of your principal — meaning you get back less than you deposited.

Before you open a CD, American Express shows you the exact penalty amount in dollars. Write it down or take a screenshot. That way, if you think you might need the money before maturity, you can decide whether the penalty is worth it.

What Happens When Your CD Matures

On your maturity date, your CD stops earning interest. American Express typically gives you a grace period (usually 10 days) during which you can decide what to do with the money without penalty. During this window, you can withdraw the full balance, let it roll into a new CD at the current rate, or transfer it to another account.

If you do nothing during the grace period, American Express will automatically roll your CD into a new one with the same term length at the current interest rate. The new rate may be higher or lower than your original rate, depending on market conditions. If you do not want to roll over, log into your account and withdraw or transfer the money before the grace period ends.

Some people use CDs as a savings ladder: they open multiple CDs with different maturity dates so that money becomes available at different times without all of it maturing at once. For example, you might open a one-year CD, a two-year CD, and a three-year CD in the same month, so one matures each year.

Who Should Consider an American Express CD

An American Express CD makes sense if you have money you will not need for several months or years and want a may provide return that is higher than a regular savings account. CDs are useful for short-term savings goals — a down payment you are saving for in two years, a vacation fund, or money set aside for a known expense.

CDs are not a good fit if you might need the money before the maturity date, because the early withdrawal penalty can wipe out your earnings. They are also not ideal if you think interest rates will rise significantly in the near future, because your rate is locked in and you cannot take advantage of higher rates without paying a penalty.

American Express CDs are also worth comparing to other options. Some banks offer no-penalty CDs, which let you withdraw without penalty (though usually at a lower interest rate). Some offer CDs with higher rates but longer minimum terms. Spending 15 minutes comparing rates and terms across two or three banks can save you money or give you more flexibility.

Tax Reporting and Your CD Interest

Interest earned on an American Express CD is taxable income. In January of the year after your CD earns interest, American Express sends you a Form 1099-INT, which reports the interest you earned. You report this amount on your federal tax return.

If your CD matures and you roll it into a new one, that is not a taxable event — you are not withdrawing the money, just moving it into a new CD. However, if you withdraw the money and do not roll it over, that withdrawal itself is not taxable (you already paid tax on the interest when you earned it), but you lose the opportunity to earn more interest.

Keep your CD confirmation email and your Form 1099-INT together for your tax records. If you have questions about how to report CD interest, a tax professional or the IRS website can walk you through it.

Frequently Asked Questions

Can I add money to my CD after I open it?

No. American Express CDs require a single deposit when you open the account. You cannot add more money to the same CD later. If you want to save more, you would need to open a separate CD with a new deposit.

What if I need my money before the maturity date?

You can withdraw it, but you will pay an early withdrawal penalty. The penalty is shown to you before you open the CD, so you know the cost upfront. If the penalty is larger than the interest you have earned, the difference comes out of your principal.

Is my money safe in an American Express CD?

Yes. Your deposit is FDIC-insured up to $250,000, which means the federal government guarantees your money even if American Express fails. If you have more than $250,000 to save, you can open CDs at multiple banks to stay within the insurance limit at each one.

Can I move my CD to a different bank before it matures?

You can withdraw the money and move it, but you will pay the early withdrawal penalty. It is usually not worth paying the penalty just to move to a different bank, unless the new bank's rate is significantly higher and you plan to keep the money there for a long time.

What happens if interest rates drop after I open my CD?

Your rate stays the same for the entire term — that is the point of a CD. You are locked in at the rate you agreed to when you opened it. This is good news if rates drop, because you keep earning the higher rate you locked in.