The Goldman Sachs Group was founded in 1869. It’s one of the world’s leading investment banks, offering banking, securities, and investment management services to corporations, other financial institutions, governments and high net worth individuals. With the launch of Goldman Sachs Bank USA for short, the bank is now looking to manage everybody’s money. We’ll give you our view of this relatively new bank in this review.
Goldman Sachs Bank USA is a New York state-chartered bank that accepts deposits from individual and institutional customers for both online savings accounts and certificates of deposit. Recently, Goldman Sachs entered the competition for online customers with its online branch, Goldman Sachs Bank USA. Goldman purchased the bank from GE Capital Bank and then rebranded it Goldman Sachs Bank USA.
As with most online banks, Goldman Sachs Bank USA offers competitive interest rates in its online-only accounts. Interest rates offered on online savings accounts and certificates of deposit are considerably higher than what are available with traditional banks and are meant to compete head to head with other competition online.
For example, Goldman Sachs Bank USA is currently paying 1.20% APY on its online savings account, compared to 1.00% APY or less from several other online banks. On CDs, Goldman Sachs Bank USA is offering higher rates than Ally Bank on certain terms, but lower on others. Here’s a rundown of their current rates.
What Is Goldman Sachs Bank USA Online?
Goldman Sachs is rolling out peace-of-mind savings through its Goldman Sachs Bank USA division. The bank is specializing in online savings accounts and certificates of deposit that offer competitive rates, no transaction fees, and, of course, FDIC insurance of up to $250,000 per depositor.
One of the bank’s stated purposes is “unlocking growth and job creation potential of small businesses.” They have a particular focus on small businesses, where they provide access to education, capital, and business support for small businesses.
Goldman Sachs Bank USA’s online banking service enables customers to check balances, track recent transactions and deposits, and receive monthly statements electronically. Customers can transfer money between linked accounts, and also schedule transfers periodically, such as weekly, monthly, on the first or last business day, or just about any time frame they choose.
How Goldman Sachs Bank USA Online Works
When you open an account with Goldman Sachs Bank USA, you go through a four step process:
- You select an account of your choice (savings account or certificate of deposit)
- Provide ownership information
- Review and sign your application
- Fund your account(s)
The whole process generally takes 10 minutes or less. You will also be required to establish a username, password, and security challenge questions. You will be issued a four-digit banking PIN in order to access your accounts.
Goldman Sachs Bank USA will use trial deposits when you open your accounts. They’ll make two small transfers into your external bank account for just a few cents. Once you verify that those transfers have been received in your external bank account, including the amount of each transfer, you will then be able to make real transfers between accounts.
Funding can be accomplished by electronic transfer, wire transfer, or deposit by check. You can also have direct deposits from your paycheck or Social Security into your Goldman Sachs Bank USA account.
You can link up to four external accounts to your Goldman Sachs Bank USA account. You can make transfers 24 hours a day, seven days per week, and start earning interest on the day your deposit is received
Goldman Sachs Bank USA Features and Benefits
Here’s a summary of the major features and benefits this online bank offers:
Interest calculated based on the daily balance method. This method applies a daily periodic rate on the balance in your account each day. The interest is then calculated every day based on either 365 or 366 days and begins to accrue on the first business day your deposit is received.
For online savings accounts, interest is compounded daily but paid monthly. The rate is also variable and can change after the account is opened. In layman’s terms, all this means your interest will compound more quickly, earning you more money over time. It’s not a big difference, but with today’s paltry savings account interest rates across the board, any little boost helps.
Deposit limits. If you opened your account before April 15, 2016, you can have a maximum of $3 million on deposit with the bank, with a maximum of $1 million per account. If you open an account after April 15, 2016, the maximum combined account balance is $500,000, or $250,000 per account.
There is no minimum initial account deposit to open up an account, except for certificates of deposit, which require a minimum deposit of $500.
Fund withdrawals. Funds can be withdrawn from your account through either electronic transfer or wire transfer. There is a limit of $125,000 per transfer when that transfer is initiated online. There is also a limit of six withdrawals per statement cycle. You can even make transfers on weekends and holidays.
Availability of funds. For electronic and wire transfers, deposits are available if they’re made before 5 PM, Central Time, on regular business days. A deposit made after 5 PM will be considered effective on the following business day. For check deposits, funds will be available on the first business day after the bank receives the deposit.
Account fees. Goldman Sachs Bank USA’s online banking charges no fees. There are also no fees for either sending or receiving wire transfers.
Customer Service. Goldman Sachs Bank USA customer service is available Monday through Friday, from 7:00 AM to 11:00 PM, central time.
Goldman Sachs Bank USA Certificates of Deposit
Certificates of deposit (CDs) can be opened with as little as $500. Terms run from six months to six years.
The Goldman Sachs Bank USA 10-day CD Rate Guarantee. This feature enables you to get the highest interest rate the bank offers during the 10-day period started on the date you open up your account, as long as your CD is funded within that timeframe.
Early withdrawal penalties on CDs. If you withdraw principal on a CD before it matures, will be subject to the following penalties:
- CD term of less than 12 months: 90 days’ interest on the amount withdrawn
- CD terms between 12 and 60 months: 270 days’ interest on the amount withdrawn
- CD terms over 60 months: 365 days’ interests on the amount withdrawn
Goldman Sachs Bank USA Caveats
You should be aware that Goldman Sachs Bank USA does have a couple of limitations.
Limited account types. Goldman Sachs Bank USA currently does not offer trust accounts or custodial accounts.
No international transfers. At this time, Goldman Sachs Bank USA does not permit the transfer of funds to and from international accounts outside of the US. This is an interesting restriction, considering that Goldman Sachs is a money center bank, which means its primary activities are lending to governments, large corporations, and other banks internationally.
Should You Use Goldman Sachs Bank USA Online?
If you’re looking for an online bank that offers aggressive interest rate returns on your savings, Goldman Sachs Bank USA is a solid candidate. The bank is backed by one of the leading financial institutions in the world and represents a secure way to get the higher returns online banking brings, without concern about the integrity of the organization behind it.
Since Goldman Sachs Bank USA aims to compete directly with online banks, it can be an excellent addition to your portfolio of online sources for the highest rates on savings accounts and CDs available.