Deal Summary: Several CD rate increases including the 60-month CD (2.40% APY), 36-month CD (2.00% APY) and 12-month CD (1.50% APY).
GS Bank increased rates by 10 to 15 bps on most of its CDs today. Its 5-year CD (2.40% APY) is now the rate leader among the internet banks. Its 3-year CD (2.00% APY) is now tied with the internet bank rate leaders. The full list of GS Bank rate increases are shown below:
- 1.50% APY 12-month CD (was 1.40%)
- 1.55% APY 18-month CD (was 1.45%)
- 1.65% APY 24-month CD (was 1.55%)
- 2.00% APY 36-month CD (was 1.90%)
- 1.90% APY 48-month CD (was 1.80%)
- 2.40% APY 60-month CD (was 2.25%)
- 2.45% APY 72-month CD (was 2.30%)
More details of these GS Bank CDs are shown in the following table. You can see the rate history of each CD by clicking on the “details” arrow on the right side of the row.
This is the third round of CD rate increases at GS Bank since April. Taking into account all three rate increases since April, the 1-year CD rate has risen 30 bps to 1.50% APY and the 5-year CD rate has risen 55 bps to 2.40% APY.
One important thing to consider when deciding on CDs is the early withdrawal penalty (EWP). GS Bank’s 6-year CD has an EWP of 365 days’ interest. The 5-year CD has an EWP of 270 days’ interest. Based on this, it’s hard to justify the 6-year CD over the 5-year CD for an extra 5 bps.
Below is a list of the important features of GS Bank’s CDs, including the details of the EWP. For more details, refer to the FAQ section of GS Bank’s website. In addition to the Q&A’s, the bottom of the FAQ section has links to important account disclosures.
GS Bank’s CD Features
- Minimum deposit is $500
- Early withdrawal penalties:
- 12 months to 5 years: 270 days’ simple interest on the principal at the rate in effect for the CD
- More than 5 years: 365 days’ simple interest on the principal at the rate in effect for the CD
- Partial early withdrawals of principal are not allowed.
- $500 minimum deposit
- 10-day grace period at maturity. Interest is earned during grace period up to the day before the funds are withdrawn.
- 10-day CD Rate Guarantee ensures you get the highest interest rate GS Bank offers during the ten-day period starting on the day you open your CD, provided your CD reaches the $500 minimum deposit.
- You have 30 days from the day you open your CD to fully fund your CD Account. The term of your CD begins on the day of the final deposit into your CD Account.
- Accounts can be funded by an internal transfer, an ACH transfer, wire transfer or check
- Monthly interest disbursements are allowed to your GS Bank savings account or to one of your linked external bank accounts
GS Bank Account Features Applicable to Both Savings Accounts and CDs
- Maximum balance of $250K for individuals (new customers)
- You may add up to six beneficiaries to each account.
- A beneficiary must be an individual; you may not name a trust or other entity as a beneficiary
- Social security numbers for beneficiaries required
- Trust accounts are not offered
- No charge for sending or receiving wire transfers
GS Bank Online Savings Account
GS Bank didn’t make a change today to the rate of its Online Savings Account, but the rate is still very competitive (1.20% APY on all balances). This rate has held since early June when GS Bank raised the rate from 1.05% APY. That rate had held for more than two years. A summary of the important features unique to the savings account is listed below:
- No minimum deposit
- Rate applies to all balances of $1 or more (currently 1.20% APY)
- Free ACH bank-to-bank transfer service
- Allows links to up to 4 external accounts
- Maximum outgoing transfer is $125K per transaction if done online (no limit if done by phone)
- No incoming transfer limit (as long as the maximum balance limit is maintained)
- ACH Transfers out take 1 to 3 business days
GS Bank is the brand name of Goldman Sachs Bank USA, and it operates as an internet bank with all of GS Bank’s products available nationwide. Accounts can be opened using GS Bank’s online application. Account owners must be at least 18 years old and must be a U.S. citizen or legal resident.
Designating beneficiaries cannot be done in the online application. You can designate the beneficiaries for each of your POD Accounts by calling GS Bank or by using the Profile/Preferences tab in Online Banking.
The brand name GS Bank was established in April 2016 when Goldman Sachs Bank USA completed the acquisition of the internet bank portion of GE Capital Bank. GS Bank continued to serve the former customers of GE Capital Bank with the same savings account and CDs as before the acquisition. I reviewed the acquisition in this April 2016 post.
Goldman Sachs Bank USA (GS Bank) is the 15th largest bank in the nation based on assets. As of the latest FDIC data (March 31, 2017), the bank has $156 billion in assets and $111 billion in deposits. GS Bank has an overall health rating of “A+” on EpBooks.us, with a Texas Ratio of 1.30% (excellent), based on March 31, 2017 data. In the past year, the Bank has increased its total non-brokered deposits by $21.30 billion, an excellent annual growth rate of 54.29%. Please refer to our financial overview of GS Bank (FDIC Certificate # 33124) for more details.
How the CDs Compare
For the sake of brevity, I’ll just compare GS Bank’s most competitive CDs, the 3-year and 5-year terms.
When compared to the 204 similar length-of-term CDs tracked by EpBooks.us which require a similar minimum deposit and are available nationally, GS Bank’s 3-year CD ranks second, below USALLIANCE Financial. However, it should be noted that USALLIANCE Financial’s special CD is scheduled to end on the 31st.
|Interest Rate||CD Length of Term||Credit Union/Bank|
|2.28% APY||36 mo Cooperative Rewards CD Special - sch to end on 8/31 ($500 min)||USALLIANCE Financial|
|2.00% APY||36-Month CD ($500 min)||GS Bank|
|2.00% APY||3 Year Yield Pledge CD ($5k min)||EverBank|
When compared to the 185 similar length-of-term CDs tracked by EpBooks.us, which require a similar minimum deposit and are available nationally, only four credit unions have higher rates. The CDs of two of these credit unions are shown below as a comparison to GS Bank’s 5-year CD.
|Interest Rate||CD Length of Term||Credit Union/Bank|
|2.60% APY||5 Year Term Deposit ($500 min)||Mountain America Credit Union|
|2.47% APY||5 Years Regular Certificate ($1k min)||Advancial Credit Union|
|2.40% APY||5 Year CD ($500 min)||GS Bank|
The above rates are accurate as of 8/31/2017.