Synchrony Bank was founded in 2003 but operated as a subsidiary of GE Capital. It's now a retail bank with billions of dollars of deposits. The bank IPOed in 2014 on the NYSE with the ticker SYF.
Like many online banks, Synchrony Bank offers the full menu of deposit products – money market (similar to checking), savings, high yield savings, certificates of deposit, and even IRA accounts.
All rates cited are as of 2H/2020. Please check for the latest rates yourself.
High-Yield Savings: No monthly service fees, 1.05% APY, no minimum balance.
Certificates of Deposit: Maturity periods of 3-months to 60-months, $2,000 minimum deposit and the 60-month CD yields 1.4% APY
Money Markets: No monthly service fee, mobile check deposit, no minimum balance, up to 0.6% APY
IRA: You can open a regular IRA account or an IRA CD account.
Synchrony Bank Credit Card
Synchrony Bank's credit card, called the Synchrony HOME Credit Card, is a no annual fee credit card that offers $150 back on your first purchase of $1,499 or more through.
Synchrony Bank also issues several white label credit cards, meaning they're run by Synchrony Bank but they are branded with others names. One popular Synchrony Bank powered credit card is Amazon.com's Amazon Prime Store Card – which gives you a $10 Amazon.com gift card upon approval plus 5% cashback at Amazon.com with no caps. No annual fee, special financing on orders $149 or more, and all the typical protections of credit cards, like $0 liability.
They also power other retail cards like American Eagle Outfitters, Athleta, Chevron, Old Navy, PayPal & eBay, Sam's Club, Toys “R” Us, Walmart and more.
Synchrony Bank Fees & Penalties
Like many online banks, there are no minimum balances for their savings or money market accounts. There is also no monthly service fees.
What is rare is that they will not charge you a fee if you exceed six withdrawals/transfers in a statement cycle. Many banks will charge this because you aren't supposed to (according to the Federal Reserve) treat a savings account like a checking account, but Synchrony won't. They do, like other banks, reserve the right to close your account if it happens too much.
With their CDs, there is an early termination fee if you make a withdrawal from your Cd before the maturity date:
- Term 12 months or less: 90 days of simple interest at the current rate
- Terms of more than 12 months but less than 48 months: 180 days of simple interest at the current rate
- Terms of 48 months or more: 365 days of simple interest at the current rate
These interest penalties are fairly standard – it's the exact same as what Bank of America and any major bank would charge.
Loyalty Perks Of Synchrony Bank
Synchrony Bank also offers “Loyalty Perks” that reward you for saving.
Whereas most institutions, like credit cards, will reward you for spending – Synchrony rewards you for saving.
The Perks Tiers are based on your balance and time with Synchrony:
Basic: Balance under $10,000 AND less than 1 year
Silver: Balance of $10,000 – $49,999.99 AND 1+ years
Gold: Balance of $50,000 – $99,999.99 AND 2+ years
Platinum: Balance of $100,000 – $249,999.99 OR 3+ years
Diamond: Balance of $250,000+ OR 5+ years
Pros and Cons Of Using Synchrony Bank
The main pros are similar with other online banks – you get low/no fees, a wide ATM network due to partnerships, debit cards, much higher interest rates, and the smartphone apps are more powerful. They offer free checks for the money market account and there is $5 in ATM reimbursements. The Loyalty Perks are a nice add-on.
For cons, there are no branches you can visit and everything happens via the app or online. You have to be comfortable with working with a bank entirely online if you want to go with Synchrony Bank.
Synchrony Bank Conclusion
Synchrony Bank is a great choice for those of you who want higher online deposit and CD rates. Because they don't have bricks and mortar rents to pay, they can pass on the savings to you.
You should really try to segregate your money into different banks for more protection and maximum reward. The FDIC only insures you for $250,000 per account.
For example, I suggest having:
- An operations bank for all your checking, ATM, and day-to-day usage needs. Your operations bank will be where your paycheck and rent checks are automatically deposited.
- An online savings bank. Online savings banks provide the highest money market and CD rates.
- A mortgage bank. Some banks offer better mortgage rates than others. It's up to you to seek the one that provides the lowest rate and go with them.
Synchrony Bank is not bad, but I think CIT Bank is much better for online savings. They consistently offer a higher rate, so check them out as an alternative.
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About the Author: Sam began investing his own money ever since he opened an online brokerage account in 1995. Sam loved investing so much that he decided to make a career out of investing by spending the next 13 years after college working at two of the leading financial service firms in the world. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate.
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