As I was reviewing the top nationally available CD rates, I noticed that many of Goldman Sachs Bank USA’s (GSB USA) High-Yield CDs offer rates that are near or at the top when compared to CDs offered by other internet banks. All GSB USA High-Yield CD rates dropped in early March, with the two longest terms (5- and 6-year) now earning 1.90% APY. The five High-Yield CDs with terms between 12-months and 4-years currently earn 1.85% APY. The minimum opening deposit of any of the High-Yield CDs is $500. The maximum amount on deposits for all individual and joint deposit accounts combined may not exceed $1 million per Account Owner.
You have 30 days from the day a High-Yield CD is opened to fully fund the CD. The term of the High-Yield CD will begin on the day of the final deposit. GSB USA also offers a 10-day rate guarantee on its High-Yield CDs. This guarantee ensures you will receive the highest interest rate offered during the 10-day period beginning on the day the High-Yield CD is opened, provided the $500 minimum deposit is met.
GSB USA has a detailed High-Yield CD FAQs page that provides a great deal of information, including a description of the Early Withdrawal Penalty:
CD terms of 12 months to 5 years – 270 days simple interest on the principal at the rate in effect for the CD.
CD terms of more than 5 years – 365 days simple interest on the principal at the rate in effect for the CD.
You cannot withdraw a portion of your principal at any time prior to maturity.
The following is a synopsis of other information from the FAQs:
- Accounts can be funded by an internal transfer, an ACH transfer, wire transfer, or check.
- Monthly interest disbursements are allowed to your savings account or to one of your linked external bank accounts.
- 10-day grace period at maturity. Interest is earned during grace period up to the day before the funds are withdrawn.
Up to six beneficiaries can be added to each account, with Social Security numbers required for each beneficiary. A beneficiary must be an individual: trusts or other entities cannot be named as a beneficiary. In fact, trust accounts are not offered at all.
For those who want the liquidity of a savings account without the possibility of more rate cuts, a No-Penalty CD is a good option. Unfortunately, following a series of five rate cuts in the last eight months, GSB USA No-Penalty CDs are no longer the most competitive no-penalty CDs available.
|1.30%||$500||$1m||Goldman Sachs Bank USA||7 Month No-Penalty CD|
|1.20%||$500||$1m||Goldman Sachs Bank USA||11 Month No-Penalty CD|
|1.10%||$500||$1m||Goldman Sachs Bank USA||13 Month No-Penalty CD|
When considering a no-penalty CD, you need to remember that longer terms are better, particularly in a falling rate environment. A shorter term provides no benefits if the APY is comparable to that of a longer-term no-penalty CD. The longer term does provide a benefit: If rates fall and you want to keep earning the established APY, just let the CD keep earning interest. If rates should rise or if you need the money, you can close it. I don’t see any downside for choosing longer-term no-penalty CDs that function like the No-Penalty CDs from Marcus.
There’s an FAQ section for the No-Penalty CDs that lists features unique to the No-Penalty CDs:
Can I add additional funds to a No-Penalty CD once it’s been opened?
Once the balance of your No-Penalty CD reaches $500 or more, you may not make additional deposits. (This is different from our High-Yield CD, which you can continue to add to during the first 30 days, even after reaching the minimum balance.)
Are there any restrictions to withdrawing funds from my No-Penalty CD?
You can withdraw the entire balance plus all interest earned beginning seven days after your No-Penalty CD is funded. If you withdraw your funds, the account will be closed.
Note: partial withdrawals of principal are not allowed.
According to CSR, closing a No-Penalty CD can be done online without any direct involvement of customer service.
However, this doesn't speed up the process: CSR stated that closing a No-Penalty CD will take one or two business days, even when the funds are transferred internally to the Online Savings Account. Update 4/20/20: I just confirmed with GSB USA that the No-Penalty CD can now be closed and the funds moved internally to the Online Savings Account without any delay as long as it has been at least seven days from the account funding.
How do I close my No-Penalty CD?
To close your No-Penalty CD, go to your Account Detail page and click ‘Close this account.' If your account is eligible for withdrawal (beginning 7 days after the day of funding), we’ll confirm your balance and ask where you’d like to transfer your funds (to another Marcus account or to your linked account at another bank). If you’d like to transfer to multiple accounts, or if you’d like us to mail you a check, please give us a call to close your account at 1-855-730-SAVE (7283).
Online Savings Account
Earlier this week, GSB USA lowered the rate on its High-Yield Online Savings account to 1.55% APY, putting its rate 20 bps lower than the current top-rate online savings accounts offered by Live Oak Bank, ConnectOne Bank, and First Foundation Bank.
Features unique to the Online Savings Account include:
- No minimum opening deposit required.
- APY applies to all balances of $1 or more.
- Free ACH bank-to-bank transfer service.
- Up to four external accounts can be linked.
- Maximum outgoing transfer is $125k per transaction if done online (no limit if done by phone).
- No incoming transfer limit (maximum balance limit must be maintained).
- ACH outgoing transfers take one to three business days.
- Funds received by ACH transfer initiated at GSB USA available on the third business day. Funds received by ACH transfer initiated by another bank available on the next business day (see FAQs for full details).
Goldman Sachs Bank USA operates its internet bank under the brand "Marcus by Goldman Sachs." Savings Accounts and CDs are available nationwide and can be opened using the Bank’s online application. Account owners must be at least 18 years old and must be a U.S. citizen or legal resident.
Four years ago, Goldman Sachs Bank USA rebranded as GS Bank as it completed the acquisition of the internet bank portion of GE Capital Bank. The Marcus by Goldman Sachs brand was established in October 2016, functioning as an online platform offering unsecured personal loans to consumers. As I described in a November 2017 blog post, Goldman Sachs decided to consolidate savings accounts, CDs, and personal loans under the Marcus by Goldman Sachs brand. All loans and deposit products are provided by Goldman Sachs Bank USA.
Goldman Sachs Bank USA has an overall health rating of “A+” on DepositAccounts.com, with a Texas Ratio of 1.74% (excellent), based on December 31, 2019 data. In the past year, the Bank has increased its total non-brokered deposits by $22.69 billion, an excellent annual growth rate of 26.88%. Please refer to our financial overview of Goldman Sachs Bank USA (FDIC Certificate # 33124) for more details.
As of the latest FDIC data (December 31, 2019), Goldman Sachs Bank USA is the twelfth largest bank in the country, with more than $228 billion in assets, deposits in excess of $168 billion, and more than 1,350,000 customer accounts.
How the High-Yield CDs Compare
When compared to the similar length-of-term CDs tracked by DepositAccounts.com that are offered by internet banks and require a similar minimum deposit, Marcus by Goldman Sachs High-Yield CD APYs* currently rank at or near the top.
The above rates are accurate as of 4/20/2020.
*We are continuing to keep our rates up-to-date, but are just too many rate cuts for us to process the changes quickly. For the time being, please be aware that the rates listed at DepositAccounts may not reflect the latest rates published by the banks and credit unions.