Goldman Sachs is getting in on the online-only bank action, offering a digital savings account at a rate of 1.05%. Not only that, you can open it with a deposit from as little as $1.
That means it’s no longer just the mega rich who can say they bank with Goldman Sachs.
The new online-only US savings account, on GSBank.com, comes as part of Goldman’s acquisition of GE Capital, the Financial Times reports, and is part of efforts by the investment bank to diversify sources of funding.
Banks’ earnings are in the toilet at the moment due to depressed global market activity and growth. Goldman is no different, with the bank’s net earnings plummeting by 60% in the first quarter. There’s a lot of pressure for investment banks to find alternative revenue sources as trading activity dwindles.
Goldman acquired just under 150,000 retail customers through the GE Capital deal that closed last week, according to the FT. GS Bank has deposits of $98 billion (£67.8 million) and also offers certificate of deposit products.
The savings account is competitively priced, with US interest rates at a rock-bottom 0.5%. Whether knowingly or unknowingly, Goldman is aping the expansion tactics of digital-only challenger bank Atom Bank here in the UK with its new savings product.
Atom has launched with a very aggressively priced 2.30% savings account here in a bid to hoover up customers with an attractive introductory rate. The new app-only bank, which is backed by Spain’s BBVA, then plans to bolt on additional banking products further down the line.
It will be interesting to see if GS Bank does as its name suggests and begins offering more retail banking services further down the line.