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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. (rates as of October 2016)

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.


The 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?



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.


Everyone hates bank maintenance fees. (If you don’t, email me – I have a few you’re welcome to take.) So, what would you think if you discovered that your bank had been charging you fees for an account you never opened? In fact, THEY secretly submitted an application and opened that account on your behalf. I’d imagine, you’d be furious.

So, you might be surprised to learn that Wells Fargo has fired over 5,300 employees over the past few years for this exact practice. A practice which, we’re learning, has affected a surprising number of customers. In fact, a consulting firm was hired by Wells Fargo to conduct an external investigation, and found that bank employees may have opened as many as 1.5 million deposit accounts without their customers’ permission or knowledge.

They also submitted 565,443 applications for credit card accounts without consent of the customers. These accounts racked up annual fees, interest charges, and even fees for overdraft protection. The resulting damage equates to almost half a million dollars in erroneous fees – over $400,000 from 14,000 credit card accounts alone, in fact.

Apparently, this practice has been going on since 2011, with employees fraudulently opening both these bank and credit card accounts. But why? Richard Cordray, director of the Consumer Financial Protection Bureau, says that,”Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses.” Ah, it’s starting to make sense now.

‘How could they possibly get away with something like this, though?’ you may be asking. Well, for fake bank accounts, employees were moving customers’ existing funds from authorized accounts into the new, fraudulent ones. Because of this, many customers were hit with insufficient funds or overdraft fees, as they didn’t have as much money in their bank accounts as they had deposited. Many employees were even going as far as creating fake email addresses and PIN numbers, in order to enroll the victimized customers in online banking services without their knowledge.

As expected, people are fuming. Many are asking how such a large bank, with an extensive network of internal controls, could even allow this to happen on such a large scale. Between the discovered deposit accounts and credit card applications, that equates to over 2 million victimized customers. Keep in mind that 5,300 employees have been fired over the past few years for this practice. It has obviously been a well-documented problem within the company for a while. So, why wasn’t something done years ago to prevent it from continuing?

Regardless of how it got so out of hand, Wells Fargo is in quite a bit of hot water now. They have, of course, agreed to pay “full restitution to all victims,” as well as been slammed with $185 million in fines — which is the largest penalty imposed on a company since the CFPB’s founding in 2011. On top of that, Wells Fargo will also refund $5 million to its impacted customers.

While $185 million sounds like a lot of money, some are questioning whether it’s even enough. Wells Fargo, after all, is worth over $250 billion, with Warren Buffet as the leading stakeholder in the company. These fines equate to a mere 0.074% of their worth. That’s a drop in the financial bucket, after such a grievous breach of trust and ethics.

This betrayal will surely have impacts on the company for years to come, though. When picking the financial institution that will hold your money (and often, your credit) in their hands, it’s imperative that they been deemed trustworthy. Most people wouldn’t choose a bank with a history of fraudulent activity or unauthorized use of personal information and funds. Maybe they will be able to earn back their customers’ faith in the coming years. Personally, I’ll be keeping my money and information at my existing credit union, whom I trust.

Are you a Wells Fargo customer? What are your thoughts on this being brought to light? If you’re not a WF customer, would you consider opening an account with them in the future?


The best high-yield online savings accounts offer strong interest rates and great customer service, making them a popular option for savers. Studies also show online savings accounts often come with lower fees.

“High-yield” is unfortunately a bit of a misnomer these days; a decade ago, interest rates were 4% and 5% among select savings accounts and money market accounts. Today, the best rates are around 1% while a fair amount are still hovering near 0%! This trend will continue until banks and credit unions need more cash from depositors.

Banking Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays Bank.

Interest rates

Interest rates are important because money shouldn’t lose too much purchasing power. In a perfect world, interest rates offered by banks should beat inflation while preserving the balance without risk. I am not aware of any bank offering a savings option with ongoing interest rates high enough to beat inflation, whether measured by the government-reported CPI-U or by any other meaningful measure of consumer prices. Nevertheless, if your savings is at a brick and mortar bank earning below 0.25% APY, choose one of the better options below.

Customer service

When evaluating customer service, there are two important factors to consider. The best banks offer all account maintenance and transfers through a professional, reliable, and easy-to-navigate website. Secondly, live customer service representatives should be knowledgeable, helpful, and available, although customers should have to deal with a representative infrequently if at all.

Based on my own experiences and reviews from other Consumerism Commentary readers, here are the most-recommended accounts for short-term savings. All of the listed interest rates directly below from our partners and in the table that follows are current but they are subject to change by the banks. Although I have nine accounts listed below the table of rates, you don’t need to have accounts with that many different banks. Choose one that fits you the best.

First, here is a list of the latest interest rates. Following this table, I offer a few of my own observations and opinions about savings accounts from nine popular online banks.

Barclays is a large, international bank that has been around for 300 years, and operates in over 50 different countries. Barclays offers a 1.00% APY on all deposits, with no minimum balance and no monthly fees.

Synchrony Bank Savings AccountAt 1.05% APY, Synchrony bank offers one of the highest rates available today on an FDIC-insured savings account. With no minimum balance required and no monthly service fees, it’s one of the most popular options.

Click here to start saving with Capital One 360!Capital One 360 offers no fees and no minimum balance requirement. Like ING DIRECT before it, Capital One 360 also has a great website and excellent customer service. So far, managing your money with Capital One 360 is just as easy as it was with ING DIRECT. Capital One 360 offers a current interest rate of 0.75% APY .

Ally Bank was selected by Kiplinger Magazine as the best savings account for 2009. Formerly known as GMAC Bank, Ally Bank provides an interest rate for their online savings account of 1.00% APY. Click here to apply.

EverBank has a variety of products including a high yield checking account, a money market account, and world currency CDs, all with top-tier interest rates. Currently, for first time account holders, Everbank’s Yield Pledge Money Market account offers a new account bonus rate of 1.11% for the first year, with an ongoing APY after that of 0.61% for account balances up to $150K. And their Yield Pledge Checking Account for first time account holders for balances up to $100,000 offers a new account bonus rate of 1.11% for the first year and the ongoing APY is tiered 0.25%-0.61% APY. Click here to apply.

FNBO Direct offers no fees and no minimum balance requirement. FNBO Direct is the online arm of First National Bank of Omaha. FNBO has an interest rate of 0.95% APY. Click here to apply.

Discover Bank offers a solid online savings account with a fast opening process; my account was opened within twenty-four hours. The current interest rate for the Discover Bank Online Savings Account is 0.95% APY.

CIT Bank was founded in 1908 in St. Louis by Henry Ittleson. Throughout the 20th century, CIT continued to grow, in all sectors. CIT Bank, an FDIC-insured institution, serves consumers and small businesses with certificates of deposit, savings accounts and custodial accounts. CIT Savings account offers 0.95% APY on all deposits between $100-$24,999 and 0.95% APY on all deposits of $25,000 and above. Click here to apply.

SmartyPig currently sports one of the better interest rates you can find online at 0.75% APY. In addition to the high interest rate, you can also convert your savings goals into gift cards and earn an additional bonus for each gift card conversion. SmartyPig is not a bank by itself, but it is a goal-oriented savings vehicle, a layer, that can be compared with other savings accounts.

HSBC Advance offers no fees and no minimum balance requirement. HSBC Advance (formerly HSBC Direct) entered the race with one of the highest interest rates ever available at 6% APY. HSBC Advance Online Savings Account has an interest rate of 0.05% APY for $15,000.

Lending Club Investing offers a significantly higher return than most banks. LendingClub is a social lending site where you can invest in loans issued to individuals and businesses. The most recent average net annualized return for notes by grade A to C is between 5.20% and 8.19%. While these investments are not FDIC insured, given the low interest rates paid by banks, LendingClub may be an alternative worth considering.

What is your favorite online savings account? Share your thoughts in the comments below.

For more banks to round out the selection, see this list of savings accounts interest rates. I have been tracking the rate changes for many years now, and this list gives you an idea of which banks have been consistently offering the highest interest rates.

Credit: iStock photo by psphotograph

Tell us: What online savings account works best for you?


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