Marcus is an online bank promoted by one of the best-known investment banks on Wall Street, Goldman Sachs. Before the launch of Marcus, all of Goldman's offerings were suited to institutions, wealthy families, and affluent individuals. To mark its entry into the retail arena, Goldman launched Marcus with attractive offerings in savings accounts, certificates of deposits, and personal loans.
The online bank is named after one of the founders of Goldman Sachs - Marcus Goldman. It does not have physical branches, and accounts and loans are mainly operated and accessed by Marcus' mobile banking app available on the Apple store.
Here we present a detailed overview of Marcus' offering.
The Marcus savings account yields an interest rate as high as 1.7% APY. The account also does not require a minimum deposit ( deposit do have to begin with $1) or any minimum balance. Marcus does not charge any accounting opening fees, maintenance fees, service fees, or fund transfer charges on the account.
You can use the account to put your emergency savings. Though there are no fees for transfers in and out of the account, you might have to pay fees to other third-party banks that you choose to link with your Marcus high yield savings account.
This savings account does not come with an ATM card, and cash withdrawal mainly happens through ACH transfer or wire transfer to your other bank accounts. Paper checks, however, can be availed by customers.
Certificate of Deposit (CDs)
High Yield CD: Marcus' Certificate of Deposit can be initiated with at least $500 with a minimum term of one year. As with all CDs, Marcus' longer-term CDs get a favorable rate of interest, which can be as high as 2.8 percent APY.
One year CD with Marcus will get you an APY of 2.5% while a three-year CD will give you an APY of 2.6%.
CDs attract an early withdrawal penalty if you withdraw funds before the end of the stipulated term. The penalty is generally charged in the form of lesser interest payout than specified in the condition of the CD.
Marcus' CD penalty ranges from 90 days of interest for a term of less than 12 months to 365 days of interest for a term of more than five years.
No-penalty CD: Marcus also offers a no-penalty CD, with terms of 7 months, 11 months, and 13 months. This CD allows you to withdraw your full CD balance after seven days of your purchase. The CD, however, pays a relatively lower interest than that of the with-penalty CDs.
No penalty CDs can be a great place to park your emergency funds, which can earn a higher rate of interest than high yield savings account while keeping the liquidity feature intact.
Marcus by Goldman Sachs also offers a no-fee, fixed-rate personal loan.
These unsecured personal loans can range from $3,500 to $30,000 and are offered at APR from 6.99% to 23.99%, with a loan term between 36 to 72 months.
The borrower's creditworthiness determines the actual APY of the borrower's loan. All loans are subject to the credit approval, and your monthly loan servicing cost (EMI) will depend on the rate of interest offered to you and the term of your loan.
Summing up Marcus by Goldman Sachs
As a customer of Marcus, you might miss the physical branch network or an ATM network that comes with a traditional bank. However, these shortcomings are very well compensated by the attractive offerings of Marcus. The limited bouquet of services makes Marcus a highly efficient provider of these services.
Marcus by Goldman Sachs can be your go-to bank if you are looking for higher earnings on your savings and excellent service as a customer. However, if you are looking for a full-service bank that can offer other services like auto loans, credit cards, or mortgage loans, Marcus falls short there.
That said, in a world where money can be moved in a couple of clicks, keeping your money in an account where you get the best bang for the buck makes most economic sense. Therefore, no matter which other bank offers you more services, you can always keep the money in a higher-yielding bank account and move the money wherever and whenever it is required.