Synchrony Bank Online Bank Review
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Fast Facts
Products:
Entire suite of banking products
HYSA APY:
4.75%
Additional features:
Cash back credit card
Availability:
Online only; no physical branches
Cost:
No monthly fees
How we bank has always been the same, at least for as long as I've had a bank account. Many people preferred going to a branch for their banking needs. Then came COVID, and everything changed! As the world began to close down, traditional banks were left scrambling to invest in their digital presence. This meant beefing up staff and adding more features to their mobile apps. But online banks, financial institutions that operate solely on the interwebs, didn't see much disruption.
According to Statista, digital banking has been growing consistently, and the number of users is forecasted to reach 217 million by 2025.
Jump To
What is Synchrony Bank
Synchrony Bank is an FDIC-insured online financial institution that offers various savings products. Because of its branchless banking model, it isn't burdened by overhead costs like a traditional brick-and-mortar bank, meaning it can pass on more savings to its customers. Synchrony Bank is owned by NYSE-listed Synchrony Financial, a Fortune 500 financial services company with over $62 billion in deposits and over 80 million active customer accounts.
Synchrony Bank offers a high-yield savings account, money market account, certificates of deposits (CDs), IRA CDs, and IRA money markets. In addition, it is also a leading provider of private-label credit cards, which are store-branded cards that can only be used at a specific retailer. The bank currently offers one Mastercard-branded credit card to the general public.
Better banking is here.
- No account fees
- Earn up to 4.50% APY
- Up to 2-day-early-paycheck
- No-fee Overdraft Coverage.
- Do it all in one app.
- Up to $2M of additional FDIC insurance through a network of participating banks.
How to open a Synchrony Bank account
To open an account, you should have a valid U.S. residence and a Social Security or Tax Identification number. You'll also need to provide your physical address, email address, occupation, information on your employer, and source of funds to open the account. This information is mandated by law in a bid to fight money laundering.
There are three ways to open an account: you can apply online, call the bank at 866-226-5638, or fill out a paper application.
Synchrony Bank financial products
High-yield savings account
The bank's high-yield savings product offers a variable annual yield (APY) of 4.75%, higher than the national average of 0.55% and rates offered by banking behemoths Wells Fargo Bank and U.S. Bank. And, of course, you don't have to worry about a minimum deposit, balance, or monthly fees. However, the online savings account may be closed if your account has a $0 balance for more than 60 days. As is common with most such accounts, interest is compounded daily and credited to your account monthly.
Money market account
A money market account allows you to write checks and cash withdraw while earning interest. The bank is currently offering 2.25% APY with no minimum balance requirements. The rate offered is higher than the national average of 0.77%, which beats those offered by Wells Fargo Bank and U.S. Bank. The interest rate offered by Synchrony Bank is variable and will be credited to your account monthly. You also have the option to get an ATM card with high-yield savings and money market accounts.
CDs
This savings product lets you earn a fixed interest rate in exchange for locking in your deposit for a specific time frame. If you leave your money untouched for three months, your deposit will accrue 2.25% APY. But you'll get 4.00% APY if you lock in your deposit for 60 months. The longer you remain invested, the more your money multiplies. Synchrony Bank's CDs don't have a minimum balance requirement.
IRA CDs
An IRA lets you build a nest egg while having certain tax advantages. Synchrony Bank's IRA CDs currently offer 4.00% APY for a 60-month term, higher than the national average of 2.33%. The lowest APY is 0.25%, which is offered for three-month terms. You can also transfer your current IRA over to Synchrony Bank. There are no minimum balance requirements, and you can choose between traditional and Roth IRAs.
IRA money market account
You have the option of choosing between a traditional or Roth IRA. The rate offered is 2.25% APY with no minimum balance. The national average is 0.77% APY, according to Synchrony Bank. You will receive a tax form for each IRA account maintained with the bank. And if you withdraw money from an IRA account, you may have to pay Uncle Sam some money.
Credit card
The Synchrony Premier World Mastercard credit card lets you earn 2% cash back on every purchase and doesn't have an annual fee. The credit card also comes with identity theft protection, which includes a monthly risk alert newsletter and regular identity monitoring. Whatever cash back you earn is credited each month automatically. In addition, the card also gives you access to Lyft and Hello Fresh credits, as well as DoorDash membership and discounts.
Two other credit cards, the Synchrony Plus World Mastercard and the Synchrony Preferred Mastercard, are offered by invitation only now. The former offers 1% cashback on each purchase.
Better banking is here.
- No account fees
- Earn up to 4.50% APY
- Up to 2-day-early-paycheck
- No-fee Overdraft Coverage.
- Do it all in one app.
- Up to $2M of additional FDIC insurance through a network of participating banks.
Synchrony Bank features
High APY
By now, it's abundantly clear Synchrony Bank offers APY that tops the national average and beats out large brick-and-mortar financial institutions. Thanks to its branchless banking model, Synchrony can pass on more savings to customers because it doesn't have high overhead costs like traditional banks.
Comparison tool
Unsure which savings product is best for you? The comparison tool lets you drill down into the specifics. You can compare high-yield savings, CDs, and money market accounts APY. You can also input an initial deposit plus monthly deposits and use a slider to determine how much you'll earn. The FDIC insures your account for up to $250,000.
Calculator
Synchrony Bank's savings goal calculator tells you how much you need to save each month to reach your goal. You can choose a car, an emergency fund, retirement, a home, or a vacation as your goal. Using the calculator is a breeze. Simply tell the calculator how much money you need, how much you have saved, and how many years or months you would like to hit your target. But your calculator doesn't factor in any interest, so you may even reach your goal early.
Educational content
A "learn" section on Synchrony Bank's website will take you to helpful financial education resources. The topics are wide-ranging, including everything from savings and spending to retirement and even life and home. In addition to personal finance advice, you can also find articles on the best Amazon deals and affordable beach essentials, to name a few.
Synchrony Bank fees
While you don't have to pay Synchrony Bank's monthly service fees, it still charges you a few other fees. While there's no fee to receive a wire transfer, you can expect to pay $25 to send a wire transfer. This fee can be waived if you have a diamond status in the bank's Perks Reward program. You'll get three wire transfers per statement cycle if you have a diamond status. In addition, the bank will also charge you a stop payment fee of $25 per request and an overnight check fee of $25.
Regarding CDs, an early withdrawal penalty applies only to the principal withdrawn, not to the interest. However, to avoid a penalty, you can also consider a CD ladder strategy, which allows you to access your funds.
Who should or shouldn't use Synchrony Bank's products
Synchrony Bank has a lot going for it: it has savings products and IRAs, which offer above-average APY and beat out competitors. High-yield savings accounts, money market accounts, and CDs don't have a minimum balance requirement either.
However, the bank has no physical branches, so anyone who likes to bank the old way may find that a deal breaker. It also doesn't offer checking, auto, or home loans.
Pros and cons
Pros
- Competitive savings rate.
- No monthly fee on high-yield deposit products.
- Credit card offers 2% cashback on every purchase.
Cons
- No checking account.
- The company doesn't offer home or auto loans.
- No own ATM network.
Better banking is here.
- No account fees
- Earn up to 4.50% APY
- Up to 2-day-early-paycheck
- No-fee Overdraft Coverage.
- Do it all in one app.
- Up to $2M of additional FDIC insurance through a network of participating banks.
Synchrony Bank vs. its competitors
Bank | Products Offered | APY |
Synchrony Bank | High-yield savings accounts, money market accounts, CDs, IRAs, credit cards | 4.75% on savings products |
Vio Bank | High-yield savings account, money market account, CDs | 1.10% to 5.30% |
Axos Bank | High-yield savings accounts, money market accounts, CDs, checking accounts, investment products, commercial banking and lending, loans and mortgages | 0.61% on savings products |
Vio Bank
Synchrony Bank and Vio Bank share a few similarities:
- They're both online banks, which means no physical branches and thus above-average APY.
- They don't charge a monthly service fee.
- Both offer a high-yield savings account, a money market savings account, and CDs.
But Vio Bank offers a flat APY of 1.10% on all balances, lower than Synchrony Bank but 5.30% on a money market account. Vio Bank also has a $100 account opening requirement. But just like Synchrony Bank, Vio Bank charges several fees, including a $30 fee on domestic wire transfers; Synchrony charges $25 for outgoing wire transfers. Neither offers a checking account.
Axos Bank
Unlike Synchrony and Vio, Axos Bank offers personal and auto loans and a checking account even though it's an online bank. It offers up to 0.61% APY on a high-yield savings account and 0.25% APY on a money market account. Neither has any balance requirements. CDs require at least a $1,000 deposit, though. It offers three checking accounts, one for high account balances and another for people who frequently use debit cards. It also provides investment products, including a robo adviser, commercial banking and lending services, and home mortgages.
FAQs
Does Synchrony Bank charge a fee for wire transfers?
There's no fee for an incoming transfer, but outgoing wire transfers will cost you $25 per transaction. However, this fee will be waived if you have diamond status in the bank's Perks Reward program.
Do high-yield savings or money market accounts have a fee?
No, they don't incur a service fee and they do not have any minimum balance requirements either.
Is the interest rate fixed or variable?
It is variable.
Better banking is here.
- No account fees
- Earn up to 4.50% APY
- Up to 2-day-early-paycheck
- No-fee Overdraft Coverage.
- Do it all in one app.
- Up to $2M of additional FDIC insurance through a network of participating banks.
The bottom line
Synchrony Bank is amongst a growing crop of banks that only have a digital presence. While this may depart from the traditional brick-and-mortar banking model, it translates into higher returns for account holders because the bank spends less on overhead costs. Synchrony Bank is owned by a financial institution with billions in deposits and offers savings products at competitive rates. It also offers products for your retirement and a credit card that returns 2% of the cash back to you on every purchase.
A few of its products don't even require a minimum opening deposit.
But even with all the bells and whistles, Synchrony Bank doesn't offer a checking account or any loans, which may force some to look for other options.
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Writer
Jasir Jawaid is Joy Wallet's Assistant Editor. He has more than 13 years of experience as a journalist covering Wall Street, equities, financial policy and regulation, and cryptocurrency and blockchain.
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