What is the Interest Rate on a Barclays Savings Account?

Barclays Bank

Barclays Bank has a long history dating back to 1690 in London, England. Its online banking and credit card business is based in Wilmington, Delaware, while its wealth unit is in New York, New York. In the United States, Barclays US primarily operates online and provides limited banking services, holding around $35.7 billion in assets. It's a fully FDIC-insured bank, which means your deposits are protected.

Many Americans may know Barclays through its rewards credit cards. They partner with retail stores and airlines to offer co-branded credit cards, allowing customers to earn rewards and benefits when they use these cards for their purchases. One notable achievement is that Barclays introduced the world's first ATM, demonstrating its innovative history.

What is the Interest Rate on a Barclays Savings Account?

In September 2023, Barclays Bank offers a single savings account called the "Barclays Online Savings Account" with an annual percentage yield (APY) of 4.35%. This is a competitive interest rate, although you can sometimes find higher APYs at other banks if you compare.

Barclays Bank is an online-only bank known for providing its customers with interest rates that are higher than the national average. Additionally, they offer some customer-friendly features, including no monthly maintenance fees, no minimum deposit requirements, and the ability to make free online transfers to and from other financial institutions.

When Will Barclays Increase Interest Rates?

Barclays recently increased the interest rates on some of its savings accounts by as much as 23%, responding to criticism of other banks for not passing on Bank Rate increases. For example, their one-year fixed-rate bond jumped from 4.3% to 5.3%, and their two-year flexible bond increased to 5.35% from 4.4%. Barclays also improved rates for "premier" customers with larger deposits.

These rate changes came into effect recently, with more details on easy-access accounts expected soon. While the rates are above the market average, they don't top the charts, as some other accounts offer more than 6%.

Barclays had faced criticism for changing overdraft limits for its customers, regardless of their financial situation. The broader banking industry has also been criticized for not passing on Bank of England interest rate increases to customers, with less than 30% of such increases reaching customers, according to the Financial Conduct Authority (FCA).

What is Barclays Online Savings?

Barclays Online Savings is a type of savings account offered by Barclays US, which operates exclusively online. It's a simple savings account with no minimum opening deposit requirement or monthly fees. The interest rate you earn is the same for all account balances above just $0.01, and there are no complex requirements to earn that interest.

However, this account has some limitations. It doesn't provide ATM access or the ability to deposit or withdraw cash, which may not be suitable if you need these features. You can add money to your account through electronic transfers, direct deposit, mobile check deposits, or by mailing a check.

Barclays Online Savings doesn't come with a checking account or a debit card, and it's not available for minors (those under 18 years old). So, if you prefer to handle all your banking in one place, this account won't fulfill that need.

On the plus side, unlike some other savings accounts, Barclays doesn't restrict the number of withdrawals you can make or charge penalties for excessive withdrawals. You can move money between your Barclays online savings account and your checking account as often as you need.

How Does the Performance of Barclays Savings Accounts Compare?

The Barclays Online Savings Account is a solid choice for savers. Compared to the national average savings account interest rate of just 0.45%, Barclays offers a rate that's roughly 10 times higher. This rate is competitive with some of the best high-yield savings accounts available.

If your current bank pays very low interest on your savings, opening a Barclays savings account is a straightforward way to earn more. Plus, with no fees or minimum balance requirements to worry about, you can grow your savings and withdraw your money whenever you need it without worrying about excessive fees. It's a convenient option for earning more on your savings.

Specifications of Barclays Savings Account

Features of Barclays Savings Account:

• APY Range: The Annual Percentage Yield (APY) for Barclays Savings Account is 4.35%.
• Minimum Balance to Earn Highest APY: You only need a minimum balance of $0.01 to earn the highest APY available.
• Minimum Deposit: There is no minimum deposit requirement to open this savings account.
• Withdrawal Limit: You can withdraw up to $250,000 per transaction from your Barclays Savings Account.
• Monthly Service Fee: There is no monthly service fee, making it a straightforward and cost-effective option.

Barclays offers simple and hassle-free banking with no minimum balance requirements, no monthly service fees, and no limits on the number of withdrawals you can make each month. You also don't need to maintain a minimum balance to qualify for a higher APY or fee waivers. However, it's worth noting that if your account balance falls below $1 for 180 days or more, Barclays reserves the right to close your account.

Barclays charges lower fees compared to many other banks. For instance, their Non-Sufficient Funds (NSF) fee is just $5, while the industry average in 2022 was $34 according to the Consumer Financial Protection Bureau (CFPB). Other fees, such as stop payment fees, cashier's check fees, and returned deposit fees, are also reasonable.

Additionally, Barclays Savings accounts and CDs are FDIC-insured, providing assurance that your deposits are protected in the event of a bank failure.

What are the Other Savings Options in Barclays?

Barclays primarily offers a limited range of savings options in the United States. Apart from the Barclays Online Savings Account, their other savings-related deposit accounts are certificates of deposit (CDs). However, it's worth noting that Barclays CDs can sometimes offer competitive annual percentage yields (APYs). If you're looking for savings options beyond a regular savings account, you might explore their CDs for potentially higher interest rates.

Additionally, Barclays is well-known for its co-branded credit cards, which offer various rewards, cashback, and occasionally balance transfer opportunities for well-qualified applicants. While these credit cards are not savings accounts, they can be a way to earn rewards and benefits when you use them for your purchases.

Comparing Barclays Savings Account Rates

Here's a comparison of Barclays savings account and CD rates against some other banks: