Barclays Online Savings Account Review

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Barclays Online Savings Account

Overall Rating

9.25

Bottom Line

Barclays Online Savings Account is an excellent choice if you generally tend to maintain a small savings account balance. Since there is no minimum initial deposit requirement, you can open an account and earn high interest on virtually any balance.

Pros

  • Higher than average interest rate
  • No initial minimum deposit
  • No monthly fees

Cons

  • Online only bank
  • No debit card

User Friendliness

9.0

Customer Service

9.0

Rates

9.0

Minimum Deposit

10.0

If you’re looking for a high-interest savings account – one where you can earn 21 times the national average on savings accounts – take a close look at the Barclays Online Savings Account.

The Bank is currently offering one of the highest interest rates being paid on savings by any bank. And there’s no minimum balance requirement, and no monthly fees, making it the perfect account for the small or casual saver, or anyone else who’s just looking for high interest on savings with no strings attached.

About Barclays Online Savings

Barclays Online Savings Account is a high-yield savings account, and one of the most user-friendly savings accounts anywhere. The account requires no minimum initial deposit and no ongoing minimum balance requirement. You can earn interest on any balance you hold in the account, beginning at $0.01.

And that interest rate is currently sitting at 0.40% APY (as of January 12, 2021). That’s greater than 5 times the rate being paid on savings accounts nationally.

Since the rate is applied to virtually all balances in the account, they can work especially well for those with small savings balances, or anyone who’s savings account balance tends to fluctuate dramatically from one month to the next. Unlike many competing banks, there’s no tiered interest rate structure to worry about. You won’t need to tie up thousands of dollars to earn a high-interest rate.

Barclays Online Savings Account at a Glance

Account Type High Yield Savings
Interest Rate 0.40% APY
Minimum Deposit None
Monthly Fees None

Features

Barclays is what you might consider being a limited-service bank. First, they have only five branches in the entire country, making them primarily an online bank (which is increasingly a non-problem). Though they don’t offer checking accounts, they do provide CDs and credit cards.

Interest earned on your account is compounded daily, and credited monthly.

Account Funding

You can transfer funds from an externally linked account, or set up direct deposits. You can also make mobile deposits from your smartphone. Alternatively, you can mail a check to the bank’s Illinois address. However, there’s no availability to make cash deposits. As well, deposits made by check or even electronic transfer are subject to a hold of up to five business days.

Checks made by mobile deposits are limited to a maximum of $5,000 per individual check, and not more than $10,000 per day. The maximum number of checks permitted for deposit is 10 per day, up to the dollar maximum. There’s also a 10-day maximum amount of $50,000, with no more than 20 deposits.

Withdrawing Funds From Your Account

To access the funds in your account, you’ll need to transfer them to an external account. It can take two or three business days for the funds to be posted to your linked account.

Fees

One of the big advantages of Barclays Online Savings Account is that you can earn high interest with no monthly fees.

Other Potential Fees:

  • $0.50: Statement copy, $0.50 per statement
  • $5: Excessive transaction charge, $5 for each transaction in excess of six per statement cycle (this is per Federal Regulation H which governs activity in savings and money market accounts).
  • $5: Official Check/Cashier’s Check
  • $5: Returned deposited item, $5 per item, not to exceed $50 per business day
  • $5: Non-sufficient funds, $5 per item
  • $25: Express mail/rush delivery charge

As you can see, the Barclays Online Savings Account comes with practically no fees of any kind.

Getting Started

To be eligible to open a Barclays Online Savings Account you’ll need to be a US citizen and at least 18 years old, have a physical US address, a Social Security number, and a valid external bank account.

You can sign up for the account through the website, supplying the following information:

  • Your full name
  • Social Security number
  • Date of birth
  • Country of citizenship
  • A valid email address
  • Your primary home address
  • A valid phone number
  • Information for the bank you’re linking to the account, including the bank routing number and your personal account number
  • Similar information will be required from a joint applicant

Once all the above has been entered on your application, you’ll need to indicate if the account will be single or joint, the specific account type (online savings or online CD), and the amount of your opening deposit.

You’ll then need to create login credentials, including a user ID, password, your mother’s maiden name, then select a security question and answer. Finally, you’ll be required to read and accept the terms of the electronic consent agreement, account terms and conditions, and complete a W-9 certification.

After your account has been opened, you can fund it by setting up a transfer from your linked bank account. The transfer can take up to five business days to complete.

Security

All deposit accounts held with Barclays are covered by FDIC insurance for up to $250,000 per depositor.

Customer Support

Customer service and support are available online, 24/7. Phone contact is available Monday through Friday, from 8:00 am to 8:00 pm, Eastern time.

Pros and Cons

Pros:

  • The account pays interest at a rate 5 times higher than the national average for savings accounts.
  • There’s no minimum initial deposit requirement, and no ongoing minimum balance requirement. You can earn interest on all account balances.
  • The account has no monthly fees, and is light on all other fees.
  • Barclays has very competitive rates on their CD products, if you need to tie up some savings for longer-term goals.

Cons:

  • Barclays is a limited-service bank. For example, they don’t provide checking accounts or most loan types.
  • The account does not include a debit card. Access to your funds will be limited.
  • As a savings account, federal law prohibits more than six transfers or withdrawals per account statement cycle, without incurring an excess transactions fee.
  • Account deposits are held for five business days for both check deposits and electronic transfers.

Alternatives to Barclays Savings Account

Barclays Online Savings Account has plenty of competition in the high-yield savings account field:

UFB Direct Bank High Yield Savings Account

For example, UFB Direct Bank High Yield Savings is currently paying 0.20% APY on balances over $10,000. The catch, however, is that you’ll earn no interest at all on the first $9,999.99. But it’s a decent yield if you have a very large savings account balance. You’ll also get to keep 100% of that interest too, because there are no monthly fees.

Next Steps:

CIT Bank Savings Builder

If you don’t have a few thousand dollars in spare cash sitting around to tie up in a savings account, check out the CIT Bank Savings Builder. You can earn 0.45% APY with a minimum balance of $25,000 – BUT(!) – you can earn the same interest rate by depositing just $100, and then making monthly deposits of $100 thereafter. There are no monthly fees for this account.

Next Steps:

Discover Online Savings Account

Discover Online Savings Account may have the simplest high-yield savings account offer there is. You can earn 0.50% APY with no minimum balance requirement, upfront or ongoing. And the account comes with no monthly fees.

Next Steps:

You can check out these and many other high-yield savings accounts at my Best High Yield Savings Accounts for 2021 guide.

Is A Barclays Online Savings Account For You?

Barclays Online Savings Account is an excellent choice if you generally tend to maintain a small savings account balance. Since there is no minimum initial deposit requirement, you can open an account and earn high interest on virtually any balance.

It’s also a good savings solution for you if you tend to maintain a fluctuating savings account balance. You don’t need to tie up several thousand dollars to earn the posted interest rate.

Barclays Online Savings Account is an outstanding choice as a savings account. But if you’re looking for a full-service bank, you may need to maintain two separate banking relationships. You can hold your savings in a Barclays Online Savings Account but maintain your regular banking services through another bank that offers the full range of services needed.

But if you want to earn high interest on your savings at any balance level, the Barclays Online Savings Account can be the perfect choice for you.

Learn more by reading our full Barclays Bank Review.

Additional Disclosures: Millennial Money has partnered with CardRatings and creditcards.com for our coverage of credit card products. Millennial Money, CardRatings and creditcards.com may receive a commission from card issuers. This site does not include all financial companies or financial offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

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