Seven weeks since its last round of CD rate hikes, Goldman Sachs Bank USA (now operating under the brand Marcus by Goldman Sachs) increased the rates on seven of its High-yield CDs today. The rate hikes were larger this time with rates gains between 10 and 20 bps. The long-term CDs had the largest rate gains, rising 15 or 20 bps. The 12-month and 18-month CD rates increased 10 bps. All seven of the new APYs are shown below in bold and are effective as of 6/13/2018. The previous APYs are noted inside parentheses.
- 12 mo - 2.30% (2.20%)
- 18 mo - 2.35% (2.25%)
- 24 mo - 2.45% (2.30%)
- 36 mo - 2.55% (2.35%)
- 48 mo - 2.60% (2.40%)
- 60 mo - 2.90% (2.80%)
- 72 mo - 3.00% (2.85%)
Goldman Sachs Bank USA is one of the first internet banks to finally reach 3% on a direct CD since the Fed’s zero interest rate policy took hold several years ago. Most of the other 3% CDs had 5-year terms, with two having shorter terms (3-year and 30-month). Goldman Sachs Bank USA’s 6-year CD is the one that reached 3% APY. The 5-year CD came close with a 2.90% APY. Goldman Sachs Bank USA is one of the few internet banks that offer direct CDs with terms above five years, and it’s currently the only one with a 3% APY 6-year CD.
Except for the 6-year CD, the rate increases didn’t move Goldman Sachs Bank USA into a rate leader status on any term, but they do keep the Bank close to the leaders. That’s especially the case for the 12-month CD in which the rates of the internet bank leaders are only 5 bps higher.
More details of these CDs are shown in the following table. You can see the rate history of each CD by clicking on the “details” arrow on the right side of the row. To review all the bank’s CDs, please refer to our Goldman Sachs Bank USA CD rate table.
High-yield Online Savings Account Rate Holds Steady
Goldman Sachs Bank USA’s High-yield Online Savings Account rate didn’t change today. It remains at 1.70% APY for balances of $1 and up. Between the March Fed rate hike and today’s expected Fed rate hike, the Bank raised the savings account rate by 10 bps twice, once in April and once in May. That suggests that we may have to wait to July and August for the next savings account rate hikes.
For no-minimum savings accounts, this account continues to be near the high end. There are only eight no-minimum savings accounts and five money market accounts with higher rates. The savings account has remained competitive during its history both under Goldman Sachs Bank USA and under GE Capital Bank before April 2016.
For more details, please refer to my last review of the High-yield Online Savings Account.
High-yield CD Review
One thing to note about 1-year, 18-month and 2-year CDs at Goldman Sachs Bank USA is that they have a hefty early withdrawal penalty (EWP) of 270 days’ simple interest. That’s not a bad EWP for a 5-year CD, but it’s harsh for terms of two years and under. Also note that the 6-year CD has an EWP of 365 days’ simple interest.
Below is a list of the important features of the bank’s CDs, including the details of the EWP.
- Minimum deposit is $500
- Early withdrawal penalties:
- Less than 12 months: 90 days simple interest on the principal at the rate in effect for the CD
- 12 months to 5 years: 270 days’ simple interest on the principal at the rate in effect for the CD
- More than 5 years: 365 days’ simple interest on the principal at the rate in effect for the CD
- Partial early withdrawals of principal are not allowed.
- 10-day grace period at maturity. Interest is earned during grace period up to the day before the funds are withdrawn.
- 10-day CD Rate Guarantee ensures you get the highest interest rate the bank offers during the ten-day period starting on the day you open your CD, provided your CD reaches the $500 minimum deposit.
- You have 30 days from the day you open your CD to fully fund your CD Account. The term of your CD begins on the day of the final deposit into your CD Account.
- 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
Features Applicable to Both Savings Accounts and CDs
One recent improvement applicable to both the Savings Account and CDs is the increased maximum balance. The maximum amount on deposit for all of your individual and joint deposit accounts combined may not exceed $1 million per Account owner. That maximum used to be $250k.
Below is a summary of the important features.
- 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
Goldman Sachs Bank USA operates the 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.
In April 2016, Goldman Sachs Bank USA completed the acquisition of the internet bank portion of GE Capital Bank. That’s when the brand name GS Bank was established. The brand name Marcus by Goldman Sachs was established in October 2016 as an online platform offering unsecured personal loans to consumers. As I described in November, Goldman Sachs decided to consolidate savings accounts, CDs and personal loans under the brand Marcus by Goldman Sachs. All loans and deposit products are provided by Goldman Sachs Bank USA.
Goldman Sachs Bank USA is the 15th largest bank in the nation based on assets. As of the latest FDIC data (March 31, 2018), the bank has $172 billion in assets and $124 billion in deposits. The bank has an overall health rating of “A+” on DepositAccounts.com, with a Texas Ratio of 1.37% (excellent), based on March 31, 2018 data. In the past year, the Bank has increased its total non-brokered deposits by $9.34 billion, an excellent annual growth rate of 15.44%. Please refer to our financial overview of Goldman Sachs Bank USA (FDIC Certificate # 33124) for more details.
How the 1-Year CD Compares
When compared to 219 similar length-of-term CDs with minimum deposit requirements of no more than $10k from banks and credit unions tracked by DepositAccounts.com, only one credit union and seven banks offer higher rates than the 12-month CD rate at Goldman Sachs Bank USA.
|Interest Rate||CD Length of Term||Early Withdrawal Penalty||Bank/Credit Union|
|2.50% APY||12-month Certificate ($5k min)||90 days||Connexus Credit Union|
|2.37% APY||12-month CD ($5k min)||90 days||State Bank of India (New York)|
|2.35% APY||12-month CD ($1k min)||90 days||iGObanking|
|2.30% APY||12-month CD ($500 min)||270 days||Goldman Sachs Bank USA|
The above rates are accurate as of 6/13/2018.
To review the top CD rates, both nationwide and in your local area, please refer to our CD rates page.