As featured in The Wall Street Journal, Money Magazine, and more!

You’re probably familiar with Goldman Sachs, at some level. The multinational banking firm, best known for investment banking, goes all the way back to 1869. But did you know that they also have a web-based arm known as Goldman Sachs Bank USA, or simply GS Bank?

It’s an online bank that pays far higher rates of interest on savings and certificates of deposit than traditional banks, and it competes favorably head-to-head with other well-known online banks. As an example, Ally Bank currently pays an APY of 1.75% on its 60 month certificate of deposit (CD). GS Bank, on the other hand, pays a 1.85% APY on its CD of the same term.

They may not be the highest paying bank in the market across the board, but they will usually lead the pack on one or more offerings. Let’s learn more about this online division and what they are offering.

About GS Bank

GS bank specializes in online savings accounts and certificates of deposit. They offer high yielding savings instruments with no transaction fees, and FDIC insurance of up to $250,000 per depositor.

Their specialty is working with the small business market. They provide smaller companies with access to relevant education, capital, and business support. In fact, their stated purpose is “unlocking growth and job creation potential of small businesses.”

GS Bank provides the services that you would expect from an online bank. You can check balances, track transactions and deposits, and receive monthly statements electronically. You can also transfer money between linked accounts, as well as make scheduled transfers at your own discretion.

How GS Bank Works

GS Bank uses a four-step process to open an account, and you can do it entirely online. Completing the process takes under 10 minutes. Want to see how easy it is?

  • Select a savings account or certificate of deposit
  • Enter ownership information
  • Review and sign your application
  • Transfer money to your account from outside accounts

For security purposes, you’ll need to create a username, password, and security challenge questions. GS Bank will then issue you a four-digit banking PIN so that you can access your account.

Trial deposits will be used when you open your account. GS Bank will make two very small (just a few cents’ worth) into your external bank account. You will then verify that those transfers have been received in your external bank account, as well as confirm the amount of each transfer. Once that has been completed, you will be able to make actual transfers between your GS Bank account and your external bank accounts.

You can transfer funds into your new account via electronic transfer, wire transfer, or check deposit. You can also set up direct deposits from either your paycheck or your monthly Social Security check.

GS Bank allows you to link as many as four external accounts, and you can then make transfers anytime, night or day. You’ll begin earning interest on your savings account or CD the very same day that a deposit is posted to the account.

Bank Highlights

GS Bank provides the full range of services that you would want, and expect, from an online bank. These include:

Minimum initial deposit requirement. There is no minimum deposit required to open a savings account. You must make a deposit into the account within 60 days of opening it, but that’s it. For CDs, the minimum requirement is just $500. This makes GS Bank a natural choice for both new and small savers.

Types of accounts offered. Individual or joint accounts only. GS Bank does not offer custodial or trust accounts, nor do they offer IRAs.

Deposit limits. The maximum amount of money you can have on deposit for all individual accounts is limited to $250,000 (combined) per account owner. This includes interest earned and credited but not withdrawn. For joint accounts, the combined maximum is $500,000, which includes interest earned and credited but not withdrawn.

Interest calculated using the daily balance method. Your interest earned begins to accumulate on the very first day you deposit money into your savings account or CD. They apply a daily periodic rate on your account balance, and it is calculated based on either 365 or 366 days. On savings accounts, interest is compounded daily, but is paid into your account on a monthly basis.

Fees. There are no fees charged in connection with your online banking accounts. That includes no fees for wire transfers.

Customer Service. GS Bank customer service is available Monday through Friday, from 7:00 AM to 11:00 PM Central time. Customer service can be reached by phone, email, or snail mail. I called the 800 number to get information and was connected to a live person within 2-3 minutes.

Availability of funds. For electronic and wire transfers, deposits are immediately available if they are made before 5 PM Central on regular business days. A deposit made after 5 PM will be considered effective the following business day. For check deposits, funds will be available on the first business day after the bank receives the deposit.

Limits on funds withdrawal. There is a limit of six withdrawals per statement cycle, which is typical with true savings instruments at all banks. (This is what distinguishes them from checking accounts.) Funds can be withdrawn from your account by wire transfer or electronic transfer, and you can also make transfers on weekends and holidays. There is a per-transfer limit of $125,000 when the transfer is done online.

Account protection. All accounts are fully protected by FDIC insurance, for up to $250,000 per depositor. Joint accounts are protected for up to $500,000 ($250,000 per depositor).

Certificates of Deposit

GS Bank’s CDs offer some of the most aggressive interest rates available. You can open one for as little as $500, with terms that run from six months to six years.

gs-bankThe 10-day CD Rate Guarantee. When you open a new CD with GS Bank, you will get the highest interest rate the bank offers within the first 10 days of purchasing the CD. Your CD must be funded within that 10 day period.

What does this mean? Say you hypothetically open a CD (day one) while they are offering a 1.0% APY. Then, 4 days later, the interest rate they are offering jumps up to 1.05%. As long as you fund the CD before day 10, you’ll be given the higher interest rate of 1.05% (even though the rate you signed up for was only 1.0%).

Bank Limitations

There are a few services that GS Bank doesn’t offer, at least not at this time. They include:

No ATM/debit card. You can access the funds in your account by electronic transfer to your account at another bank or by wire transfer. But at this point in time, GS Bank does not offer an ATM/debit card. That may not be a deal breaker, however. The primary purpose of either a savings account or a CD is to earn high interest on your deposits. The accounts are not designed to serve as a typical on-demand deposit accounts, so this may not bother you at all.

Limited account types. Right now, GS Bank doesn’t offer either custodial accounts or trust accounts.

No international transfers. At least for the time being, you won’t be able to transfer of funds to and from accounts outside of the US. However since Goldman Sachs is a multinational bank, we can reasonably expect this feature to be provided at some point in the future.

No IRA accounts. GS Bank does not provide IRA accounts, as of October 2016.

Is GS Bank the Right Online Bank for You?

Most banks today pay something close to nothing – often less than 0.10% year – on savings accounts, CDs, and money market funds. This is why you need a relationship with a bank like GS Bank, in order to hold the majority of your savings. Even if you have great features elsewhere, such as award-winning checking accounts and credit cards, you still need a strong bank that pays high interest rates to hold your savings instruments.

So, what about other online banks that also pay high interest? One major advantage that GS Bank has is that they are backed by one of the most respected financial institutions in the world: Goldman Sachs. Not only should that make your investments more secure, but it also holds the promise of expanded features and opportunities in the future. The kind that only a world-class banking organization could provide.

To get more information, check out the GS Bank website, where you’re certain to find savings opportunities that will interest you.

Have you signed up for a GS Bank account yet? What has been your experience?



What if you could increase your after-tax investment returns by 15% over 30 years? Betterment is claiming you can do just that with their Tax-Coordinated Portfolio. What’s more, they claim that it can even work across several accounts at the same time.

Interested? Read on…

Who is Betterment?

Betterment is a robo-advisor. In fact, it is the largest independent robo-advisor in the US, with more than 175,000 customers and more than $5 billion in assets under management.

As a robo-advisor, Betterment is an automated, technology-driven investment platform that creates and maintains a diverse portfolio for each of its investors. They do this by compiling what they believe will be the best mix of exchange traded funds (ETFs) in your portfolio. They use index based ETFs because they are both low cost and tax efficient (their low turnover minimizes the amount of short-term capital gains generated).

Learn More: Index Funds versus ETFs — Which is Right for You?

Your entire portfolio is constructed of just 13 different ETFs — six stock ETFs and seven bond ETFs — which essentially represent the global financial markets as a whole.

Betterment’s investment management method is based on Modern Portfolio Theory, or MPT. The theory holds that proper asset allocation is more important in portfolio management than individual security selection. This is also why Betterment uses broad based index funds in creating your asset allocation. The right asset mix will provide both a maximum rate of return while keeping risk to a minimum.

Your portfolio is constructed only after Betterment determines your investment horizon, goals, and risk tolerance. This will enable them to include the appropriate blend of both stocks and bonds to fit your investment profile.

Once your portfolio is established, it is fully automated – including regular rebalancing – so that you don’t need to get involved in the process at all. Your sole responsibility is to fund your account to help it grow.

Betterment offers both taxable and tax-sheltered (retirement) accounts, so that you can do all of your investing on the platform.

Betterment Fees

Best of all are the very low fees that they charge. They are just a fraction of what typical traditional investment advisors charge to perform essentially the same service.

The fee is based on a percentage of the amount of money that you have invested on the platform. It is a single, annual fee, as there are no separate charges for transactions or rebalancing. There are three fee tier levels, based on account balance:

  • Less than $10,000: 0.35% of your average annual balance. There is no minimum initial account balance required. However, you must commit to a $100/month minimum automatic deposit. You will be charged a flat rate of $3 per month otherwise.
  • $10,000 to $99,999: 0.25% of your average annual balance.
  • $100,000 or more: 0.15% of your average annual balance.

What is the Tax-Coordinated Portfolio?

Betterment’s Tax-Coordinated Portfolio, or “TCP,”  is based on the use of an automated strategy referred to as asset location. Within that strategy, they manage multiple accounts as a single portfolio. That includes placing assets that are taxed at higher rates into more favorably taxed accounts, like those for retirement. Betterment’s research has estimated that TCP can produce an average annual benefit of between 0.10% to 0.82%.

Using one generalized scenario, TCP boosted after-tax returns by 0.48% per year. After 30 years, this provided an additional 15% for retirement. That’s an impressive benefit, considering you don’t need to do anything extra in order to utilize its advantages.

Betterment came up with TCP through their team of quantitative analysts, tax experts, software engineers, designers, and product managers, who spent more  than a year building the service. They believe that they are the first investment service to offer such a product, and are now making it available to all investors on the platform.

How Betterment’s Tax-Coordinated Portfolio Works

The Tax-Coordinated Portfolio places high tax assets in tax sheltered accounts, such as IRAs. Lower taxed assets are then held in taxable accounts.

That means that high dividend yielding stocks would be held in an IRA to reduce what is called tax drag.Tax drag refers to the reduction in return on investment that comes from the tax liability generated by an investment.

In order to take advantage of TCP you need to have both a taxable account and either a tax-deferred account, like an IRA, or a tax-exempt account, such as a Roth IRA. The benefit will not extend to any non-Betterment accounts.

This means that if you want to take advantage of TCP, you will have to roll outside accounts into your Betterment account. That includes your taxable and tax-deferred investment accounts. Part of the reason that TCP requires at least one retirement account is that Betterment can make larger rebalances in such accounts without increasing your tax liability.

You will still have the ability to change your allocation in your TCP, right on the investment platform. However, any time you do, you run the risk of causing “taxable events,” so Betterment recommends against this. If you do make changes, you can use Betterment’s Tax Impact Preview feature (see below), which will show you a real-time tax estimate before you confirm any allocation changes.

TCP is available to all Betterment investors. However, it is generally not recommended for those whose federal tax bracket is 15% or less. You should also be aware that TCP does not have any impact on any investment accounts that you hold outside of Betterment.

Betterment Tax-Coordinated Portfolio Components and Tools

TCP is comprised of three major components, including:

Tax Impact Preview – This tool provides a real-time tax estimate for a withdrawal or allocation change, and you can use it before you confirm the transaction. It will show you the information you should be focusing on to make an informed decision, before you actually make the changes. It has the potential to lower your tax bill as a result.

Tax Impact Preview will consider if the benefits of the change will outweigh the costs, or if you might consider waiting in order to avoid short-term capital gains. It may also ask you to consider if there is another source of funds you can access that will not have any impact on your tax liability.

TaxMin – This tool will help you select the most tax-efficient lots, selling losses first, and short-term gains last. TaxMin considers the cost basis of the lot, realizing all losses for any gains, regardless of when the shares were purchased.

Lots are sold in the following order, so as to minimize the tax impact:

  • Short-term losses
  • Long-term losses
  • Long-term gains
  • Short-term gains

The algorithm exhausts each category before moving to the next. Within each category, lots with the highest cost basis are sold first. With a gain, the rule is as follows: the higher the basis, the smaller the gain. This results in a lower tax burden. In the case of a loss, the opposite is true: the higher the basis, the bigger the loss. This can, of course, offset gains.

Tax Loss Harvesting (TLH) – This service is available on taxable investment accounts only, since tax-sheltered accounts don’t need it. According to Betterment’s Tax Loss Harvesting White Paper, Betterment’s TLH service generates as much as 1.94% in annual tax offsets. This compares to 0.95% by other automated investment services.

In general, tax loss harvesting involves selling securities that have sustained losses, then buying correlated assets – those that provide similar exposure – to replace the securities that have been sold. The strategy generates capital gains losses, but keeps the portfolio consistent with its intended target allocation mix.

Should You Invest With Betterment Tax-Coordinated Portfolio?

What can you say about a service that has the potential to improve your investment performance by an average of almost 0.50% (OK, 0.48%) per year? Oh, and it charges no extra fee for the benefit.

With the growing popularity of robo-advisors, and Betterment being the largest in the field, TCP  makes the case for using this platform more compelling than ever. This is one of those rare situations in your investment life where you will have nothing to lose, but much to gain.

Betterment offers a compelling combination of automated professional investment management, along with TCP. It also has one of the lowest fee structures in the industry. And you can invest on the platform with both your taxable accounts and your retirement accounts.

You owe it to yourself to check Betterment out.



Ah, millennials. They are the first generation to grow up with iPhones, FaceTime, and GPS apps. Most of their banking is done online and, thanks to Amazon, the majority of web purchases arrive at their doorstep within 2 business days. They hit the generational jackpot when it comes to convenience and ease, it would seem.

And now, according to a new study from Fidelity, they are also very likely to still be receiving financial help from their parents, even if they’re “out on their own.”

The newest study, published today, was conducted between July and August 2016, and included responses from 305 Millennials (aged 25 to 35). They had an average salary of $68,000 and an average total savings of $67,000. Of these 305 young adult respondents, 48 percent had a 401(k) and 28 percent had an IRA. Also, note that Millennials as a whole also have an average of over $37,000 in student loan debt. (They do hold less credit card debt than the generations before them, though.)

A very interesting find of the study, aside from their financial allocation habits, was the increase in their support system. From the participants’ responses, the study found that the Millennial generation is cutting their parents’ financial cord much less, and much later, than in years past.

Keeping the Cord Intact

Nearly half of these Millennials (47 percent) own up to letting mom and dad pay for a number of things since they’ve been on their own. Some of these costs include family-type expenses – like cell phone plans, streaming services, subscriptions, and insurance plans. They may also include more specific contributions, like car payments and grocery bills.


More notable than budget help, though, is the fact that there’s been an uptick in adult kids actually moving back in with the ‘rents.

This new study found that 21 percent of Millennials report living at home, which is up from the 14 percent found in 2014’s study. While some of these kids never left, a good number of them consciously chose to move back home after being in the real world for a few years. Of course, 67 percent of respondents also said that it’s more acceptable now than ever for adult children to move back home with their parents, so perhaps that’s one encouraging factor.millennials-4

Another 66 percent of Millennials said that they live outside of their parents’ home and cover all of their own expenses. Of those truly independent folks, though, 25 percent of them admit to having moved back in with their parents at some point for financial reasons. (Only 12 percent of Gen X respondents said they had done the same, along with 9 percent of the baby boomers.)

So, what are these young adults doing with all of the money? If they aren’t spending on rent or their own cell phone plans, where is it going? Turns out, they’re saving most of it!

They Are Saving More Than Their Older Counterparts

A surprising 85 percent of Millennials said that they have some form of savings. This is up from the 77 percent who said the same in 2014’s study.millennials-3

Emergency funds are at the financial forefront, as 59 percent have money saved up for serious, unexpected costs. In fact, not only do a large number of them have emergency money tucked away, but they also, on average, have more money saved up than the older generations. Millennials have a whopping $9,100 tucked away on average. They say this amount should cover about six and a half months of their living expenses. Gen Xers, on the other hand, only have $8,700 and Boomers? A mere $7,100.

Looking further ahead, the majority of Millennials are also saving for retirement. When the study was conducted in 2014, 51 percent of respondents said that they had a retirement savings account. This year’s study, however, found that number had jumped up to a solid 60 percent.millennials-5

Sure, this generation is much younger and admits that retirement is still far, far away. But the actual number of them saving for their golden years is still comparable to older generations. Of Gen Xers, for example, 61 percent are saving for retirement, along with 67% of baby boomers.

But They Aren’t Doing Enough to Make That Money Work For Them

Sure, the Millennials seem to be doing a great job at tucking money away. Perhaps that has to do with their parents’ willingness, and ability, to help out. I would imagine this makes it much easier to put cash in a savings account. There’s extra money when mom and dad are covering auto insurance bills each month or you’re riding their cell phone plan coattails. But hey, to each his own.

There is one problem, though. Young adults don’t seem to be saving their money as smart as they could.

The vast majority of Millennials are saving their emergency fund in a traditional savings account. There, it’s likely to earn less than 0.25 percent in interest. (According to Bankrate, in fact, the average money market and savings account APY (as of 10/14/16) has been 0.11% for 22 consecutive weeks.) Of course, this isn’t going to accumulate the same return as a brokerage or investment account.

Speaking of, only 8 percent of Millennials are keeping their money in one of those types of accounts, compared to 11 percent of Gen Xers or 23 percent of baby boomers.

What Are They Focusing on Instead?

Many of these 25-35 year olds are more conservative than they should be when it comes to their money. As a result, they are missing out on potential returns.

Though 63 percent have investment accounts, only 9 percent of Millennials would use “investor” to describe themselves. Instead, 46 percent would identify with being a “saver” and 44 percent would instead say they’re a “spender.”

They’re tucking cash away in IRAs (28 percent) and 401(k)s (48 percent), along with the emergency funds mentioned above. Accumulating more savings is a priority to 44 percent of them, as is building an emergency fund (also 44 percent). But this younger generation is also very concerned about the here and now.

So, why are Millennials moving in with their parents or taking advantage of mom and dad’s financial help? Many of them say it’s in order to afford just their essential living expenses. In fact, 38 percent cite this as their reason. A whopping 33 percent are working to reduce their credit card debt. Another 30 percent of them are trying to pay off their often-crippling student loans. They aren’t racking up the high credit card debt that their older counterparts accumulated. Instead, they seem to be very worried about financial security.

Fidelity asked them whether money concerns keep them up at night. One-quarter of respondents said that yes, they worry “all the time” about their financial future. (Interestingly enough, this is about the same percentage of Gen Xers and baby boomers who said the same thing.) Another 17 percent said that they worry a few times a week or more.

So, What Does This All Mean?

It’s obvious to the younger generation – at least, to those who are paying attention – that their financial future is less secure than generations past. They have seen a number of financial crises in their lifetime, which may have impacted how they view money, debt, and the importance of saving for the future.

They have heard talks of Social Security running out. They’ve seen high unemployment numbers in recent years, and witnessed a house market crash. College educations, which were supposed to guarantee their careers, have become more less affordable. A degree also doesn’t get them as far in the working world as promised. Our country is in record debt, as are its citizens. Personally, I think Millennials are right to be a little spooked. I’m glad to see that we are shifting to financially-conscious young adults, even if moving back home is what’s allowing that to be possible.

As long as our up-and-coming generations are getting concerned with their money, their financial futures, and the need to stay out of debt, our country has a chance to shift its mindset. Perhaps something else will change within our society that can support Millennials’ penny-pinching. Until then, this seems to be the logical (and more readily acceptable) option.

Parents, don’t downsize your home just yet – the nest might not stay empty for long!


In case you didn’t know, today is National Online Bank Day! Exciting, huh? (Don’t worry, I didn’t have it marked on my calendar, either). Some online banks are offering promotional discounts and interest rates to celebrate, with Ally being one of them.

Ally Bank is one of the more popular online banking institutions, offering a range of checking, savings, and money market accounts, as well as a number of CD options. And to celebrate National Online Bank Day, they are offering a promotional CD rate for the next few weeks.

From now until November 7, 2016, you can get a 15-month select CD with an appealing 1.25% APY. After the initial 15 months are up (around January 2018), it will automatically renew into a 12-month High Yield CD. In case you were wondering, Ally’s High Yield CDs are currently earning 1.05% for the 12-month term version (as of 10/11/16).

The promotional 15-month CD also includes Ally’s Ten Day Best Rate Guarantee. All you need to do is fund your CD within 10 days of opening. Then, Ally will automatically give you the best interest rate for your term and balance tier. This ensures that you’ll get the best rate available, even if it goes up between when you open your CD and when you fund it.

Of course, as with all Ally CDs, your deposits are insured by the FDIC up to the maximum amount allowed. Your interest is also compounded daily, ensuring that your money grows even faster.

Lastly, make sure to note that if you decide to pull your money out before the 15 months has passed, an early withdrawal penalty will apply. Ally does offer a No Penalty CD, if there’s a chance you’ll need your money before the term ends. However, the promotional interest rate mentioned here does not apply.

If you’d like to open one of these promotional 1.25% CDs, you can visit Ally here and sign up.


How to Find the Most Affordable Cell Phone Plans

by Abby Hayes

Over the past few years, cell phone providers have declared an out-and-out war to win over consumers. This spells good things for the consumers, who can now take advantage of more low-cost cell phone plans than ever. These days, even the “big four” cell providers — Sprint, T-Mobile, AT&T, and Verizon — are lowering their […]

4 comments Read the full article →

How to Get Your Credit Report for Free

by Abby Hayes

Many consumers know that they can get a free annual credit report from each of the three credit reporting bureaus: Equifax, Experian, and TransUnion. But this report only shows your credit report, not your actual credit score. When you go to get your free annual credit report, the credit bureau will likely ask if you […]

0 comments Read the full article →

An Overview of The CFPB Mortgage Protection Rules

by Kevin Mercadante

Beginning in January 2014, the Consumer Financial Protection Bureau, or CFPB, issued new rules to protect mortgage borrowers. The rules deal primarily with what is known as the “servicing” side of the mortgage process. That’s everything that happens after a mortgage closes, from setting up escrows and crediting payments to foreclosures. There are nine rules […]

0 comments Read the full article →

2016 Federal Income Tax Brackets and Marginal Rates

by Stephanie Colestock

Can you believe we’re already in September? The year has flown by, and IRS Tax Year 2016 will soon be coming to a close. While your filing deadline isn’t until April 17, 2017 (the 15th will fall on a Saturday), now is the perfect time to begin thinking about your taxes, maxing out your retirement […]

4 comments Read the full article →

Former ITT Tech Students Find Hope in Available Options

by Stephanie Colestock

After 50 years of providing higher education services, ITT Technical Institute closed its doors abruptly in September, without offering its students a fall semester. With more than 8,000 ITT Tech employees now jobless and all students left without a clear plan, this news comes as a shock to many. Exactly What Happened? In a news […]

0 comments Read the full article →

Standard Deductions and Exemptions for Federal Income Tax

by Luke Landes

Most taxpayers can choose between itemizing tax deductions to reduce taxable income, which requires accurate record-keeping and support, and taking the standard deduction. The standard tax deduction is a fixed amount that reduces the amount of money on which year-end taxes are calculated. Generally, if you can show that you’ve had more deductible expenses than […]

23 comments Read the full article →
Page 1 of 32512345···50100150···Last »