Making Savings a “Dream”: A Review of Barclays Online Bank

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Making Savings a “Dream”: A Review of Barclays Online Bank

Consistently Competitive Rates. 24/7 Customer Care. Ally Bank, Member FDIC.

Barclays Bank has its roots in 17th century London and its legacy includes financing the world’s first industrial steam railway and introducing the world’s first automated teller machine. While Barclays is still headquartered in London, it has operations in more than 50 countries and U.S. customers can take advantage of its services through online banking.

As a member of the FDIC, Barclays can offer customers the same insurance protections that brick and mortar banks can. But Barclays is truly a saver’s financial institution. A review of Barclays’ online banking services shows how this bank stands out from others with features that truly reward saving.

Basic savings

Barclays’ 1.00 percent annual percentage yield is comparable with the rates offered by other online banks, and it offers a competitive interest rate while charging no monthly or annual service fees. Barclays permits direct deposit, but does not offer a higher interest rate for setting up that feature, a perk that some banks offer. But Barclays does not require its customers to carry a minimum balance as some banks do.

Customers who withdraw more money than they have in their account are subject to a non-sufficient fund fee, but that penalty is typical of any bank.

Like many online banks, Barclays requires its customers to have an external account, a bank account with another U.S. financial institution from which you can transfer money to or from your Barclays account. This external account must be in the same name as the Barclays account, but Barclays does offer the flexibility of linking to payment processing companies such as PayPal, Dwolla, Coinbase, Venmo, and Square. Barclays also works with third-party financial management software, such as Mint and Hello Wallet.

Making saving a “Dream”

Barclays Bank is a saver’s bank. In addition to a conventional savings account, Barclays offers what it calls a Dream Account – an account the offers bonuses. Savers who make deposits into a dream account each month for six consecutive months will earn a 2.5 percent bonus on the interest earned over those six months. Also, a saver who makes no withdrawals from the Dream Account over six consecutive months stands to gain another 2.5 percent bonus on the interest earned over those months. Like the regular Barclays savings account, Dream Accounts require no minimum deposit. But Barclays caps deposits to Dream Accounts account at $1,000 per month, per Dream Account.

Barclays does offer tools that account holders can use guide their accounts toward a goal, such as paying for college or a car. The online “Dream Assistant” helps Barclays customers calculate how much they need to contribute to the account over a specified period of time in order to reach the savings goal.

Saving with CDs

Account holders looking for additional ways to make their money grow can put their money in Barclays online certificates of deposit, with terms ranging from three months to 60 months. The current annual percentage yield for a 60-month CD is 2.05 percent, which is competitive compared to 60-month CDs offered by other online banks.

Savings for minors

Barclays permits children under the age of 18 to hold accounts with the bank. But these accounts require an adult to be a joint account holder. Children have the same ability as an adult account holder to make deposits, check balances, and review account activity. But Barclays does not permit minors to withdraw money from the account. Withdrawals must be handled by the adult who jointly holds the account.

Federal law limits withdrawals or outgoing transfers from online savings and money market accounts to six transactions per month, and Barclays is no exception. But Barclays does offer its customers the option of opening up to 25 total accounts with the bank. The higher-interest Dream Accounts are limited to three total. Even with those restrictions, the bonuses that Barclays offers through its Dream Accounts provide an attractive growth alternative other online savings accounts.