Goldman Sachs Bank USA Ups Rates On Online Savings Account and CDs

This morning, Goldman Sachs Bank USA (now operating under the brand Marcus by Goldman Sachs) increased the rate of its Online Savings Account by 20 bps to 2.25% APY. There were also a few CD rate hikes. The 12-month CD rate increased 10 bps to 2.75% APY, and the rates of all three of the No-Penalty CDs went up, with the 13-month No-Penalty CD rate now at 2.35% APY. All five of the new APYs are shown below in bold and are effective as of 1/4/2019. The previous APYs are noted inside parentheses.

Thanks to DA reader buckeye61 for posting on these rate hikes in the DA Forum.

Online Savings Account

This rate hike moves Goldman Sachs Bank USA ahead of the rates of savings and money market accounts at several of the large and well-established internet banks including Ally, Synchrony Bank, Barclays, Capital One and FNBO Direct. Only CIT Bank’s Savings Builder account (with its special requirements) has a higher rate. You can see below how Goldman Sachs Bank’s Online Savings Account recent rate history compares to the other large internet banks since the last two Fed rate hikes.

• Jan 4: Goldman Sachs Bank USA High-yield Savings: 2.25% APY
• Jan 3: CIT Bank Savings Builder: 2.45% APY
• Dec 27: Barclays Online Savings: 2.20% APY
• Dec 25: Synchrony High Yield Savings: 2.20% APY
• Dec 20: American Express National Bank Personal Savings: 2.10% APY
• Dec 19: Federal Reserve Target Funds Rate: 2.25% to 2.50%
• Dec 13: FNBO Direct Online Savings: 2.15% APY
• Nov 21: CIT Bank Savings Builder: 2.25% APY
• Nov 15: Ally Bank Online Savings: 2.00% APY
• Nov 15: American Express National Bank Personal Savings: 2.00% APY
• Nov 14: Discover Bank Online Savings: 2.00% APY
• Nov 9: Capital One 360 Money Market: 2.00% APY, $10k+
• Nov 6: Synchrony High Yield Savings: 2.05% APY
• Oct 30: Barclays Online Savings: 2.05% APY
• Oct 26: Goldman Sachs Bank USA High-yield Savings: 2.05% APY
• Oct 19: FNBO Direct Online Savings: 2.00% APY
• Oct 11: Discover Bank Online Savings: 1.90% APY
• Oct 5: CIT Bank Savings Builder: 2.15% APY
• Oct 3: Discover Bank Online Savings: 1.85% APY
• Oct 2: Synchrony High Yield Savings: 1.90% APY
• Oct 12: Goldman Sachs Bank USA High-yield Savings: 1.95% APY
• Oct 5: Ally Bank Online Savings: 1.90% APY
• Sep 27: American Express National Bank Personal Savings: 1.90% APY
• Sep 27: Barclays Online Savings: 1.90% APY
• Sep 26: Federal Reserve Target Funds Rate: 2.00% to 2.25%

Goldman Sachs Bank began increasing its Online Savings Account rate in June 2017. Before then, the APY had remained at 1.05% for more than two years which includes the time when the savings account was under GE Capital Bank. This was a pretty competitive rate back then.

A summary of the important features unique to the Online Savings Account is listed below:

• No minimum deposit
• Rate applies to all balances of $1 or more (currently 2.25% APY)
• 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
• Funds received by ACH transfer initiated at Goldman Sachs Bank 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)

No-Penalty CDs

Goldman Sachs Bank’s rate increase of its 13-month No-Penalty CD (2.35% APY) moves it just ahead of Ally Bank’s 11-month No Penalty CD (2.30% APY). Goldman Sachs has an advantage due to its small minimum deposit of $500. The main disadvantage at Goldman Sachs is a delay of up to two business days to receive the funds into a Goldman Sachs Online Savings Account when the CD is closed early. This can be done without any delay at Ally Bank.

The two shorter-term No-Penalty CDs actually had larger rate increases. Both went up 20 bps. However, I see no reason to open one of these instead of the 13-month CD. The no-penalty feature makes a shorter term unnecessary.

No-Penalty CD Review

The No-Penalty CDs have a minimum deposit of $500. The Bank allows early withdrawal anytime beginning seven days after your No-Penalty CD is funded. No partial withdrawals are allowed.

There’s an FAQ section on these No-Penalty CDs. Unlike their High-Yield CDs, you don’t get 30 days from account opening to keep adding to the CD:

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.)

The No-Penalty feature functions the same as it does at Ally Bank and CIT Bank with no partial withdrawals allowed:

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.

Based on the following Q&A, closing a No-Penalty CD can be done online without direct involvement of customer service. However, this doesn't speed up the process. According to a CSR, closing the CD will take one or two business days, even when the funds are transferred internally to the Online Savings Account.

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).

High-yield CDs

Out of all of its High-yield CDs, Goldman Sachs Bank only increased its 12-month CD rate (2.75% APY). All of the long-term CD rates remained unchanged. The 12-month yield is now ahead of the yields of the 18-month (2.65% APY) and the 24-month (2.70% APY). For a higher rate, you have to extend maturity to at least 4-years (2.80% APY).

To review all the bank’s CDs, please refer to our Goldman Sachs Bank USA CD rate table.

One thing to note about 12-month CD at Goldman Sachs Bank USA is that it has a hefty early withdrawal penalty (EWP) of 270 days’ simple interest. That’s not a bad EWP for long-term CDs, but it’s harsh for terms of two years and under.

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

Availability

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.

Bank Overview

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 2017, 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 14th largest bank in the nation based on assets. As of the latest FDIC data (September 30, 2018), the bank has $179 billion in assets and $130 billion in deposits. The bank has an overall health rating of “A+” on DepositAccounts.com, with a Texas Ratio of 2.02% (excellent), based on September 30, 2018 data. In the past year, the Bank has increased its total non-brokered deposits by $15.26 billion, an excellent annual growth rate of 25.52%. Please refer to our financial overview of Goldman Sachs Bank USA (FDIC Certificate # 33124) for more details.

How the Online Savings Account Compares

When compared to the 216 Savings Accounts that are nationally available, there are nine savings accounts with higher rates than the Goldman Sachs Bank Online Savings Account.

How the No-Penalty CDs Compare

It only makes sense to consider the longest-term No-Penalty CD. So I’ll compare Goldman Sachs Bank USA’s 13-month No-Penalty CDs to the 11-month no-penalty CDs at Ally Bank and CIT Bank. Chartway Credit Union also offers a no-penalty CD. It has a term of 12 months. These are currently the only institutions (with nationally available accounts) that I’m aware of that are offering these types of no-penalty CDs. Occasionally, AgFed Credit Union offers very competitive no-penalty CDs. Its last one had a 2.40% APY with a 30-month term. This AgFed deal ended in July.

The other alternative to these no-penalty CDs is a savings or money market account. The savings accounts provide more deposit and withdrawal flexibility, but the rate isn’t guaranteed to last unless there’s an intro guarantee period.

The table below compares Goldman Sachs Bank USA’s 13-month No-Penalty CD with the other no-penalty CDs and with the top two savings accounts.

The above rates are accurate as of 1/4/2019.

To review the best Savings, Money Market and CD rates, both nationwide and state specific, please refer to our Savings Account rates table, Money Market Account rates table and our CD rates table.