A high-interest online account that pays a competitive 1.20% APY, with no account fees and can hold up to $250,000.
There are more ways than ever to bank, transfer money and save your hard-earned dollars. But with so many available options, how can you know which is right for you?
In addition to the traditional account you can open at your local bank, you can now choose an online savings account that typically come with higher interest rates.
We take a look at one option for online savings from GS Bank to help you make a decision.
What are the benefits of an online savings account with GS Bank?
Money magazine named the Goldman Sachs online savings account the “Best Stand-Alone Account for Savings” in 2016. It was also recognized on Kiplinger’s Personal Finance list of the Best Deals in Online Banking 2016 — Hassle-Free Savings.
Here are some of the competitive advantages of the GS Bank online savings account:
- No minimum opening deposit. Open your GS Bank online savings account with any amount.
- No transaction fees. You won’t see fees associated with this savings account.
- High APY. GS Bank offers a competitive 1.20% APY, which is considerably higher than those of its national competitors offering closer to 0.01% APY.
- Easy transfers. Transfer the money in your savings account to an external account online or by phone. Or set up a wire transfer by phone to any account held with another US financial institution. You can also deposit funds into your savings account through the mail by check.
- Daily compounded interest. With an interest rate of 1.19%, GS Bank calculates interest daily and pays it out monthly.
- Easy registration. Open an account from anywhere you have access to a secure Internet connection. Simply provide your registration information and create an username and password.
What’s the difference between an interest rate and an APY?
Your interest rate is the simple interest you’re paid on an account or an investment over the period of a year. For example, if you’ve invested $1,000 into an account that comes with 1% interest, you’ll have earned $10 on that investment at the end of a year.
The annual percentage yield is different. An APY is an annual rate of return that takes into account compounding interest over a year. In short, it’s the interest rate compounded monthly over the course of a year — or the total interest you’d yield if the account remained untouched for a year.
What should I look out for?
Goldman Sachs’ online account is ideal for savers, but here’s what you should know before opening one.
- Existing customers only. You aren’t eligible for an online savings account unless you already hold an account with Goldman Sachs.
- No ATM or bank branch access. This account limits your transactions to electronic and wire transfers only.
- Limited monthly transactions. Exceeding your maximum of six withdrawals or transfers per month could result in the permanent closure of your account.
- Maximum balances enforced. The maximum amount you’re allowed to carry across your online accounts is $250,000, including interest.
- No mobile app. You can access your account through a browser, but Goldman Sachs has yet to release an app to streamline the online customer experience.
How do I sign up?
- Go to the GS Bank website and click “Open Now.”
- Choose “savings” from the drop-down menu and then choose your opening deposit.
- Follow these steps and then fund your opening deposit.
Be prepared to supply the following information when you sign up:
- Social Security Number
- Date of birth
- Valid U.S. physical address
- Phone number
What other savings options does Goldman Sachs have?
In addition to its online savings account, GS Bank offers its customers online certificates of deposit.
CDs are offered with flexible terms from six months to six years. Rates range from 0.60% APY on a six-month term to 2.30% APY on a six-year term. CDs are FDIC insured and provide the option of transferring monthly interest accrued to an externally linked account.
A minimum deposit of $500 is required, but you’re extended a10-day CD Rate Guarantee that ensures you receive the highest APY available as long as you deposit the minimum within 10 days of opening the account.
What is GS Bank?
GS Bank is the bank of Goldman Sachs, the multinational finance company founded in 1869 and headquartered in New York City. This online bank emphasizes customer service, trust, simplicity, security and putting its customers first.
GS Bank is a member of the FDIC and the Federal Reserve System offering two exclusively online accounts for its clientele: an online savings account and certificates of deposit.
What is the 10,000 Women initiative?
In 2008, Goldman Sachs launched 10,000 Women, a program designed to reach out to female entrepreneurs around the world with business education, mentoring, management training and access to capital.
To date, the initiative has reached more than 10,000 women in over 56 countries.
The GS Bank online savings account offers a competitive 1.20% APY, no account fees and several convenient options for transferring money. The most significant drawbacks of this account are the lack of ATM access, transaction limits that jeopardize your account if you go over, and requirement that you must already be a GS customer to apply.
If you’re already a Goldman Sachs client — or plan to become one soon — the online savings account could be a feasible savings option.