Marcus by Goldman Sachs Review

FT Contributor  | 

If you’re comfortable with online-only banking, you can benefit from higher interest rates and little to no fees. That’s because online banks don’t have the same overhead as a traditional bank. Because they don’t have to worry about physical locations and the staff required to run them, they save money, which is passed back to you. Learn how Marcus by Goldman Sachs online banking works to decide if it’s right for you.

What Is Marcus by Goldman Sachs?

Goldman Sachs was founded by Marcus Goldman in 1869 and has been one of the top investment banks for 150 years. The investment bank has expanded beyond its high-net-worth client base to offer Marcus by Goldman Sachs, its online banking division offering personal loans and savings accounts requiring fairly low deposit amounts to get started.

Types of Accounts

Marcus by Goldman Sachs offers consumers three types of accounts. Your money is safe — all deposits are FDIC insured up to $250,000. Here’s a closer look at each type of account:

Online Savings Account

The Marcus high-yield Online Savings Account comes with one of the highest interest rates on the market. Your money will earn a 1.70% annual percentage yield (APY). There is no minimum balance required to open the account and benefit from the higher interest rate. You won’t have to worry about fees either. Marcus accounts are only limited in two ways — the number of withdrawals and the maximum balance held.

As with all savings accounts, the federal government limits withdrawals and transfers to six per month. Marcus by Goldman Sachs limits your savings account to a maximum balance of $1,000,000.

To make a deposit, you can transfer funds between linked accounts, via wire transfer, by setting up a direct deposit, or mailing a check to:

Goldman Sachs Bank USA
P.O. Box 4571
Carol Stream, IL 60197-4571.

To withdraw funds, you can transfer funds between linked accounts, have someone initiate an automated clearing house (ACH) transfer from your account, send a wire transfer, or request a check in the mail by calling customer service at 1(855) 730-7283.

Several CD Options

If you don’t need access to your savings, a certificate of deposit (CD) could be a good savings option. Marcus’s CD rates vary according to how long you park your money in a CD — your options vary between six months and six years. You’ll need a minimum of $500 to open a CD. Here are the Marcus CD rates you can earn, according to the length:

  • Six months: 0.60% APY;
  • Nine months: 0.70% APY;
  • 12 months, 18 months, two years, three years, and four years: 1.85% APY;
  • Five and six-year terms: 1.90% APY.

When you compare the high yield savings account rate of 1.70% with the CD rates, it’s not worth locking your money up in a CD for a set period of time less than 12 months. Only after you commit to at least one year will you earn more interest from a Marcus CD. Withdrawing your funds from a CD early will cost you a penalty of 90 days to up to one year in interest earned on the principal, depending on the CD term length.

Marcus by Goldman Sachs offers a more flexible CD option called a No-Penalty CD. You’ll earn a 1.70% APY on a 7-month term, 1.60% APY on an 11-month term, and 1.50% APY on a 13-month term. With this type of CD, you won’t get hit with a withdrawal penalty, as long as you wait seven days after funding.

A No-Penalty CD may be a good option if you have your eye on investing in a longer-term certificate of deposit to lock in a fixed interest rate, but suspect interest rates could go down in the next few months. If your money is held in the No-Penalty CD, you can withdraw the funds to invest them into a longer-term CD with no penalties when you see interest rates decrease.

Personal Unsecured Loans

Marcus by Goldman Sachs offers personal loans you can use for debt consolidation, home improvement, vacations, and your wedding. The bank claims their loans have no sign-up costs, late fees, or prepayment penalties. Enrolling in autopay will save you an additional 0.25% annual percentage rate (APR) discount on loans that range between 6.99% and 28.99% APR.

You may complete the whole process online as long as you’re over 18 years old, have a Social Security number, and have a valid U.S. bank account.

Is Marcus by Goldman Sachs Worth It?

Marcus is worthwhile if you don’t mind managing your savings through the mobile app or online portal. Weigh the pros and cons to decide if the online bank is worth it:

Pros of Marcus by Goldman Sachs

  • Accessing your funds isn’t as immediate, reducing impulse spending;
  • You’ll earn high interest rates on your savings;
  • Customer service is available seven days per week;
  • No fees associated with your accounts;
  • Low to no minimum account balances required;
  • Well-designed mobile banking app;
  • Access to personal loan products;
  • Your funds are FDIC insured up to $250,000.

Cons of Marcus by Goldman Sachs

  • No brick-and-mortar locations;
  • Cash deposits aren’t possible;
  • Limited ways to withdraw and deposit funds;
  • Some of the Marcus CD rates are not as competitive as the high yield savings account interest rate.

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This post was updated March 25, 2020. It was originally published March 25, 2020.