American Express Bank is the a part of the well known Credit Card Company we know as AMEX or American Express. American Express Bank is bona fide federal savings bank and issues Certificates of Deposits to its customers.

The good news is the some of CD rates American Express Bank is offering are above national average. There are a few CD products where their rates are far below the national average.

National Average of CD Rates

As of today, AMEX’s three month certificate of deposit are  yielding .60 percent which is below prevailing average rate  of 0.725. The 6 Month CDs are yielding rates of 1.00 percent  which is also below national average of 1.018 percent.

The certificate of deposit rate which are higher than national averages are the ones that are for Long term.  These days national average for 12 month CD rates is at 1.308 percent.  American Express is offering 1.75 APY on 12 month certificates of deposit. Similarly the spread between national average and American Express Bank’s 18-Month CD rates is significant. earlier is at 1.447 percent while later is at 2.15 percent.

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This Monday, credit card issuing companies VISA and MASTERCARD announced that they have settled the anti-trust law suit filed by Discover Financial Services. Discover accused both of the companies of entering in to exclusivity contracts with banks. Such contracts prohibited banks and  other financial institutions to issue competing cards. Discover filed for $6 billion as compensation but settled for less than half that amount.

Visa has a larger credit card holder base and paid the major chunk of settlement amount. Visa Paid $1.8 Billion. While MasterCard with second largest penetration paid only $862.5 Million.

This amount looks big but it is peanuts when it is viewed in context of  Total US Credit Card Market Size. According to Bloomberg

The value of U.S. credit card purchases was $2.17 trillion in 2007, up from $426 billion in 1993.

Previously, AMEX (American Express Company) sued both of credit card Giants and managed to extract about $5 billion in settlement.

So It is obvious that VISA and MASTERCARD have struck a great deal. Paying under $10 billion for un-restricted access to a multi-trillion dollar market is good business in every sense of word.

How these two play with each other is yet to be seen…

More on this story can be read here