This morning, Goldman Sachs Bank USA (now operating under the brand Marcus by Goldman Sachs) increased the rates of five of its High-yield CDs and of its new 13-month No-Penalty CD. There was no rate change on the Online Savings Account. Out of the six CD rates that increased, the new 13-month No-Penalty CD rate (2.25% APY) is the most competitive. All six of the new APYs are shown below in bold and are effective as of 12/11/2018. The previous APYs are noted inside parentheses.
- 13 mo - 2.25% (2.15%)
- 12 mo - 2.65% (2.55%)
- 18 mo - 2.65% (2.55%)
- 24 mo - 2.70% (2.60%)
- 36 mo - 2.75% (2.65%)
- 48 mo - 2.80% (2.70%)
The 5-year and 6-year CD rates remained the same. With the flattening of the yield curve, banks don’t seem to be in a rush to raise their long-term CD rates. The Goldman Sachs Bank 5-year online High-yield CD rate remains at 3.10% APY, and this hasn’t changed since September 4th.
Goldman Sachs Bank has been offering new-issue brokered CDs with 5-year rates above its 5-year online High-yield CD rate. Last week, the brokered 5-year CD rate was 3.55%. Today, Vanguard has them listed with a 3.45%. This leads me to believe that Goldman Sachs Bank's 5-year online High-yield CD rate won't be rising anytime soon.
More details of Goldman Sachs Bank USA 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.
Goldman Sachs Bank’s rate increase of its 13-month No-Penalty CD moves it to be equal to the top-tier rate of Ally Bank’s 11-month No Penalty CD (2.25% 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.
There were no rate increases on Goldman Sachs Bank's 7-month (2.05% APY) and 11-month (2.10% APY) No-Penalty CDs. 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 Online Savings Account Rate Holds Steady
Goldman Sachs Bank USA’s High-yield Online Savings Account rate didn’t change today. It remains at 2.05% APY for balances of $1 and up. On October 26th, the Bank increased the savings account rate from 1.95% to 2.05% APY.
For no-minimum savings accounts, this account continues to be near the mid-range. 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 12-, 18- and 24-month 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 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
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 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 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. We now have 20 banks offering yields from 2.25% to 2.50%. 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.
|Interest Rate||Account (Minimum balance)||Bank|
|2.50% APY||High Yield Statement Savings ($5k min)||EBSB Direct|
|2.40% APY||MySavings Account (no min)||MySavingsDirect|
|2.25% APY||13-Month No-Penalty CD ($500 min)||Goldman Sachs Bank USA|
|2.25% APY||11-Month No Penalty CD ($25k min)||Ally Bank|
|2.05% APY||11-Month No-Penalty CD ($1k min)||CIT Bank|
|2.00% APY||12-Month no penalty CD ($500 min)||Chartway FCU|
The above rates are accurate as of 12/11/2018.