Best Rainy Day Fund

Saving money and putting it aside might sound like some far-out concept for many of us, but savings is critical for future success.  Being able to balance your current budget while setting aside funds for something down the line is a great skill to master when it comes to financial independence.  While some people use a rainy day fund for a home or family emergency others may use it for a vacation or a large purchase like new furniture or a car.  Whatever it may be you want to save for, saving is critical, the drawback is the little return you typically earn with money just sitting in a bank.  Of course the money you save in your rainy day fund is safe and FDIC backed in case of the unexpected, but that doesn’t mean you don’t want it to do something.  In some cases, if you are more of a risk taker you may invest your savings in funds or stocks to try to capitalize on additional gains and/or dividends while the money isnt needed. There is of course risk here as the value could drop and you could lose money that no insurance would ever pay you back.

There is another, more stable, and better return option. American Express Personal Savings currently offers one of the highest interest rates for a savings account. While most of the savings account nationwide are offering 0.05%-0.1% APY, this online-only American Express account offers 0.9% APY.  The interest is what makes having a savings account worthwhile to begin with. If the money is going to sit there, wouldnt you want it to work for you and earn you as much as it can?  If you factor in inflation your money may actually be losing value in a lower yielding account over time.

I personally use two American Express Personal Savings account right now as a major rainy day fund and a minor/mid range purchases fund.  The website recently got a major overhaul and the design and functionality is now much more user friendly.  The application process is incredibly simple and very similar to a normal bank application with personal info, automatic deposit setup, etc.  As part of the setup a few cent deposit will be made to verify your linked bank account for transfers and after this, typically 2 days, you are ready to use the account.

Using the account is simple.  There isnt much pizzaz or anything special about the account or the interface. There is also no mobile app available at this time, but you can use the mobile website through your browser.  If you do some Google research on the account there are mixed reviews.  Like any product, there are negative and positive situations.  There are reports of slow money transfers, multiple days of “unaccounted” transfers and even poor customer service. I have been with the bank for almost three years now and have happily been collected great interest payments, absolutley no complaints.  My only complaint is I use the account so rarely that I forget my password and end up locking myself out. I have to call customer service to unlock, but the process takes about two minutes and I have found the staff to be very helpful.