Deal Summary: Online Savings Account, 1.30% APY on all balances of $1 and above.
GS Bank raised its Online Savings Account rate by 10 bps to 1.30% APY. This is the second rate increase this year. In June, GS Bank had its first savings account rate increase since GS Bank was formed in April 2016 from Goldman Sachs Bank’s acquisition of the internet-bank portion of GE Capital Bank.
As I mentioned last week when Barclays increased their rates, the combination of internet bank competition and the expectation of future Fed rate hikes are likely important factors that are pushing internet banks to increase their rates. The rate increases are small, but that should be expected based on the Fed’s gradual rate hikes.
GS Bank’s rate hike isn’t big enough to move GS Bank to be a rate leader, but it does put them ahead of several other big internet banks. It also puts them even with other big internet banks that have recently increased their rates to 1.30% APY. We now have eight internet banks offering a savings or money market account with a 1.30% APY.
Before the June rate hike, GS Bank’s Online Savings Account APY had remained at 1.05% for more than two years. This period includes the time when the savings account was under GE Capital Bank. A summary of the important features unique to the savings account is listed below:
- No minimum deposit
- Rate applies to all balances of $1 or more
- Free ACH bank-to-bank transfer service
- Allows links to up to 4 external accounts
- Maximum outgoing transfer is $125K per transaction if done online (no limit if done by phone)
- No incoming transfer limit (as long as the maximum balance limit is maintained)
- ACH Transfers out take 1 to 3 business days
Some additional important features are listed below. These features are applicable to both the Online Savings Accounts and CDs.
- Maximum balance of $1 million for individuals (new customers)
- You may add up to six beneficiaries to each account.
- A beneficiary must be an individual; you may not name a trust or other entity as a beneficiary
- Social security numbers for beneficiaries required
- Trust accounts are not offered
- No charge for sending or receiving wire transfers
GS Bank used to limit deposit balances for new customers to $250k. This has recently been increased to $1 million.
Thanks to DA reader, SYC, for posting on this rate increase news in the DA Forum.
Competitive CD Rates
|2.40%||$500||-||Goldman Sachs Bank USA||5 Year CD|
|1.65%||$500||-||Goldman Sachs Bank USA||12 Month CD|
Last week GS Bank increased the rates on four of its CDs. Its 1-year and 5-year CD rates are now very competitive. For more details, please refer to our CD rates table for GS Bank and my latest GS Bank CD review.
GS Bank is the brand name of Goldman Sachs Bank USA, and it operates as an internet bank with all of GS Bank’s products available nationwide. Accounts can be opened using GS Bank’s online application. Account owners must be at least 18 years old and must be a U.S. citizen or legal resident.
Designating beneficiaries cannot be done in the online application. You can designate the beneficiaries for each of your POD Accounts by calling GS Bank or by using the Profile/Preferences tab in Online Banking.
The brand name GS Bank was established in April 2016 when Goldman Sachs Bank USA completed the acquisition of the internet-bank portion of GE Capital Bank. GS Bank continued to serve the former customers of GE Capital Bank with the same savings account and CDs as before the acquisition. I reviewed the acquisition in this April 2016 post.
According to this Reuters article, “Goldman Sachs has been trying to do more business with ordinary consumers to diversify its business and have a more stable source of funding.” The article mentioned that their “online deposits from individuals now total $12 billion.” As of the latest FDIC data (June 30, 2017), Goldman Sachs Bank had $106 billion in total deposits. Out of that $106 billion, $55 billion are retail deposits and $48 billion are brokered deposits. In June 30, 2016, retail deposits totaled $52 billion and brokered deposits totaled $59 billion.
Goldman Sachs Bank USA (GS Bank) is the 15th largest bank in the nation based on assets. As of the latest FDIC data (June 30, 2017), the bank has $151 billion in assets. GS Bank has an overall health rating of “A+” on DepositAccounts.com, with a Texas Ratio of 1.42% (excellent), based on June 30, 2017 data. In the past year, the Bank has increased its total non-brokered deposits by $3.18 billion, an excellent annual growth rate of 5.81%. Please refer to our financial overview of GS Bank (FDIC Certificate # 33124) for more details.
How the Online Savings Account Compares
As I mentioned above, we now have eight internet banks offering a savings or money market account with a 1.30% APY. When compared to the 204 Savings Acccounts and 176 Money Market Acccounts tracked by DepositAccounts.com that are available nationally with similar balance requirements and limitations, six savings accounts and one money market account have higher rates. Below is a sample of these seven accounts that have higher rates, showing how they compare with GS Bank.
The above rates are accurate as of 10/12/2017.
To review the top Savings and Money Market rates, both nationwide and state specific, please refer to our Savings Account rates table and Money Market Account rates table. To find the best accounts in your area, please refer to our new Rates Map page.