Amex is launching its first-ever all-digital checking account — and you can earn points

Feb 8, 2022

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A major player is entering the world of digital checking accounts.

The American Express® Rewards Checking program is launching today and will initially be available to eligible U.S. Amex consumer cardholders. With a digital consumer checking product (plus its existing online savings account option), Amex intends not only to be your main mode of payment, but also a way to manage your money and keep it safe. What’s more, checking account holders will be able to earn Membership Rewards points on purchases made with their debit card, which is potentially a major development for some customers.

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“We are meeting a need in the market with the continued expansion of our membership portfolio,” Liz Bergman, vice president of digital checking and debit product management at American Express, told TPG in a phone interview.

Bergman said that cardholders have been requesting an Amex checking product, and this is primarily meant to satisfy that demand.

Here are all the details of this new digital checking account from American Express along with how users can earn Membership Rewards points.

Earning points on debit transactions

(Photo courtesy of American Express)

Perhaps the most intriguing feature of this new checking account for points and miles aficionados is that you can earn Amex Membership Rewards points on debit card transactions at a rate of 1 point for every $2 spent on eligible debit card purchases.

On the downside, that’s not very lucrative — and in most situations, you probably shouldn’t switch from earning points on purchases with a consumer Amex card instead. However, considering that most debit cards don’t earn rewards of any kind, this is a pretty big deal.

Read more: Why a credit card is a smarter choice than a debit card

According to TPG’s independent valuations, a single Membership Rewards point is worth 2 cents. Therefore, a 1% return (according to our valuations) isn’t terrible. Of course, this debit card isn’t intended for you to switch from, say, earning 5 points per dollar on The Platinum Card® from American Express for flights booked directly with airlines or with American Express Travel (on up to $500,000 on these purchases per calendar year).

But for some purchases, such as paying taxes or when your credit card isn’t accepted at select merchants but a debit card is, earning any points at all is a positive (and welcome) change.

Combining points

The Membership Rewards points earned through Amex Rewards Checking are the same as those earned across Amex’s consumer cards. The upside to this? You can combine your points for maximum value — which includes transferring them to travel partners.

If you only have an Amex consumer card that earns rewards other than Membership Rewards points, such as the Blue Cash Preferred® Card from American Express or a cobranded card like the Delta SkyMiles® Gold American Express Card and Hilton Honors American Express Surpass® Card, you can still register for Amex Rewards Checking and earn points on your debit card transactions. However, your only option will be redeeming for a deposit into your account at a rate of 0.8 cents per point. So really, this new account is mostly targeted at folks with Membership Rewards-earning cards from Amex.

(Photo courtesy of Amex)

APY and other perks

At the time of writing, Amex Rewards Checking includes a 0.50% annual percentage yield (APY) on the entire account balance, which Amex says is 10 times higher than the national rate. That interest is in the form of cash, not Membership Rewards points.

When asked about the potential to earn Membership Rewards points instead of cash as interest (similar to how the cobranded savings account from Bask Bank and American Airlines can earn interest in the form of AAdvantage miles), Bergman said, “Cash is the move right now, but we always will consider other ways to satisfy the needs of our cardholders.” So if you end up opening one of these accounts and want to earn points as interest instead of cash, be sure to let Amex know and they may change these terms.

There are no monthly maintenance fees or minimum balance fees on accounts, which are two big positives. In addition, Amex debit card purchases offer purchase protection, covering accidental damage or theft. The benefit requires no enrollment and is provided at no additional charge. It can help protect covered purchases made on your eligible card against accidental damage or theft, for up to 90 days from the covered purchase date and is limited to up to $1,000 per occurrence, up to $50,000 per account per calendar year.

Related: Best credit cards for purchase protection

What’s missing

But while the overall simplicity of this product is certainly a benefit, it’s also a bit disappointing that there is no incentive for having a high balance in your checking account, or for also holding specific premium cards.

At least at launch, Amex Rewards Checking is a one-size-fits-all program for every cardholder in the Amex consumer portfolio.

This is a bit different than other checking account programs from major banks. For instance, Bank of America’s Preferred Rewards customers earn a 25%, 50% or 75% bonus on select Bank of America credit cards, depending on the size of their deposits and investments with Bank of America and Merrill.

And unlike Chase Sapphire banking, which requires a minimum combined account balance of $75,000 (or charges a $25 monthly account fee), the Amex debit card doesn’t waive or refund ATM fees worldwide.

However, Amex checking does get you access to fee-free ATM withdrawals at 37,000 MoneyPass locations. In a quick search of the New York City area, these ATM locations are mostly at convenience stores such as 7-Eleven and (somewhat ironically) at Capital One bank branches.

Bottom line

With no fees, no minimums, a competitive APY and the ability to earn Membership Rewards points from debit card purchases (albeit at a low rate), American Express has devised an intriguing checking account product.

With a bit more fine-tuning, including perks for higher balances or perhaps those with premium cards, this may be a no-brainer for those embedded within the Membership Rewards and Amex ecosystem.

The information for the Amex Rewards Checking program has been collected independently by The Points Guy. The card details on this page have not been reviewed by the card issuer.

Featured photo by The Points Guy. 

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