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GS Bank USA: Rising star in high yield online savings from Goldman Sachs Bank USA

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GS Bank logoLaunched as a subsidiary of The Goldman Sachs Group, Goldman Sachs Bank USA (GS Bank USA) made headlines when it jumped into retail banking specializing in online bank accounts. With its low minimum deposit requirements and high interest rates, GS Bank USA hopes to position itself as one of the best online banks amidst fierce competition. [Goldman Sachs Bank USA is a MoneyRates.com advertiser.]

In 2015, Goldman Sachs Bank USA announced it acquired $16 billion in deposits previously owned by GE Capital Bank. As part of its strategy to diversify and branch into online deposits, GS Bank USA completed this acquisition in April 2016 and offers both online savings accounts and certificates of deposit.

Open high yield online savings accounts with $1

Although Goldman Sachs is known as a wealth management giant, customers don't need millions to open an account with GS Bank USA. In fact, GS Bank USA offers free savings accounts and does not charge transaction fees. There is no minimum opening deposit requirement and you need just $1 to begin earning interest on your online savings account.

Online savings interest rate: 1.05 percent

As a bank specializing in online deposits, GS Bank USA has the advantage of higher interest rates than its branch-based competitors. The annual percentage yield (APY) for online savings is 1.05 percent for rates as of March 24, 2017. This is higher than other major banks like Bank of America and Citibank.

Personal customer service online or over the phone

While bank customers may prefer face-to-face interactions to do their banking, they can still get a personal experience when contacting customer service representatives with their questions about their account or balance. Customers at GS Bank USA can reach a customer service representative with their account questions through messaging the GS Bank USA website or calling the number listed on its site, www.gsbank.com.

Customers banking with GS Bank USA can withdraw money via electronic transfer or wire transfer. Note that there is a six withdrawal or transfer limit per statement period for online savings accounts, including for GS Bank USA.

Certificate of deposit with a rate guarantee

For higher, guaranteed returns, look into certificates of deposit at GS Bank USA, which have a minimum deposit of $500 and terms between 6 months to 6 years. While there are more restrictions with withdrawals and penalties compared to online savings accounts, GS Bank USA CDs offer higher interest rates and APYs, including via its 10-day CD Rate guarantee.

Available CD terms at GS Bank USA

  • 6 months

  • 9 months

  • 1 year (12 months)

  • 1.5 years (18 months)

  • 2 years (24 months)

  • 3 years (36 months)

  • 4 years (48 months)

  • 5 years (60 months)

  • 6 years (72 months)

10-day CD Rate guarantee

GS Bank USA provides a 10-day CD Rate guarantee for CD account customers, giving customers the highest APY offered at the bank within 10 days of customers opening an account. The bank requires that you make your deposit within 10 days of the account being opened to earn these high CD rates.

Be aware that there are early withdrawal penalties for withdrawing from a CD before it reaches maturity so choose your CD terms carefully.

Financial management tools and security

GS Bank USA offers financial management tools through its GS Bank USA Online Banking platform to perform basic functions, such as checking account balances or transactions and transferring money. However, the bank does not offer a mobile app to help customers oversee their accounts like many of its competitors do.

Online banking customers are protected through various security tools provided by GS Bank USA, including multi-factor authentication, secure browser requirements and firewalls.

Why GS Bank USA is and is not right for you

With its online savings accounts and deposits products, GS Bank USA is a good alternative to other big-name banks. Its free savings accounts featuring a high APY and no minimum deposit requirement is great for customers looking to avoid bank fees and earn interest along the way.

Customers can also rest assured that GS Bank USA is a member of the the Federal Deposit Insurance Corporation (FDIC) and that their deposits have FDIC insurance coverage. GS Bank USA customers have coverage up to FDIC insurance limits of $250,000 per depositor, per bank.

While its lack of fees make the bank accessible to a large number of online banking customers, GS Bank USA may not be right for you if you prefer an institution with brick-and-mortar locations or need a mobile app to manage your finances. Additionally, choose a different bank if you want to open an account for a child as owners of these deposits accounts must be 18 years or older.

Despite being brand new to the online deposits game, GS Bank USA is already making a name for itself, especially with its high yield savings and CD accounts.

Editorial Note: This content is not provided by Goldman Sachs Bank USA. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by Goldman Sachs Bank USA.

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