Goldman Sachs Bank USA (now operating under the brand Marcus by Goldman Sachs) increased rates on its Online Savings Account and three of its CDs today. GS Bank was renamed to Marcus by Goldman Sachs last month.
The Online Savings Account rate increased 10 bps to 1.50% APY. It’s the second big internet bank to reach 1.50% and it should put pressure on other big internet banks to hike their rates. I’m a little surprised by this move since Goldman Sachs Bank USA just had a 10-bps rate increase about two weeks ago. It’s a sign that competition among internet banks is heating up.
Two weeks ago Goldman Sachs Bank USA increased its long-term CD rates. Today, the shorter-term CD rates were increased. All three CD rates went up by 15 bps which makes them more competitive, but competition has been fierce on short- and mid-term CDs. The new CD rates are still 20 to 35 bps below the rate leaders. The full list of CD rate changes for today are shown below:
- 1.90% APY 2-Year CD (was 1.75%)
- 1.85% APY 18-Month CD (was 1.70%)
- 1.80% APY 1-Year CD (was 1.65%)
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.
|1.90%||$500||$1m||Goldman Sachs Bank USA||High-yield 24 Month CD|
|1.85%||$500||$1m||Goldman Sachs Bank USA||High-yield 18 Month CD|
|1.80%||$500||$1m||Goldman Sachs Bank USA||High-yield 12 Month CD|
To review all the bank’s CDs, please refer to our Goldman Sachs Bank USA CD rate table.
Thanks to DA reader WheelinDealin for posting on the rate increase in the DA Forum.
High-yield Online Savings Account Review
Today’s Savings Account rate increase is the fourth rate hike since Goldman Sachs Bank USA began hiking rates last June. Before June the account had a 1.05% APY which had held for more than two years. The first two rate hikes increased the rate by 25 bps and it took four months. These last two rate hikes increased the rate by 20 bps, but it only took just over two weeks. This definitely shows that the pace of rate hikes has picked up.
The brand change to Marcus by Goldman Sachs did include some account improvements. One FAQ on the bank’s website describes the recent changes:
If I have a savings account, what should I expect to change?
What you love about GS Bank won’t change with Marcus. Some improvements we've made include reducing the steps it takes to open a new account, streamlining external account linking and introducing chat servicing to answer your questions. And we still make it a priority to protect your privacy and safeguard your account information.
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 (currently 1.50% 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
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.
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 (September 30, 2017), the bank has $158 billion in assets and $108 billion in deposits. The bank has an overall health rating of “A+” on DepositAccounts.com, with a Texas Ratio of 1.32% (excellent), based on September 30, 2017 data. In the past year, the Bank has increased its total non-brokered deposits by $3.99 billion, an excellent annual growth rate of 7.16%. Please refer to our financial overview of Goldman Sachs Bank USA (FDIC Certificate # 33124) for more details.
How the Online Savings Account Compares
Only two no-minimum savings accounts and one no-minimum money market account have rates higher than the Goldman Sachs Bank USA Online Savings Account. There are two additional savings accounts with higher rates, but they have a large minimum balance requirements. You can see all of these by using our Savings Account table and Money Market table (Be sure to set the deposit amount to larger values to see all of them.) The comparison below excludes the accounts that have minimum balance requirements of $25k+.
|Interest Rate||Account Name||Credit Union/Bank|
|1.60% APY||Dollar Savings Account (no min)||DollarSavingsDirect|
|1.55% APY||Premier High Yield Savings (no min)||CIT Bank|
|1.51% APY||Money Market Account (no min)||Northern Bank Direct|
|1.50% APY||Online Savings Account (no min)||Goldman Sachs Bank USA|
The above rates are accurate as of 1/12/2018.
To review the most competitive CD rates, both nationwide and state specific, please refer to our CD rates table.