The Bottom Line: Marcus by Goldman Sachs is a fully digital bank that offers high returns and transparent loans when compared to many of its peers. While not the most accessible, banking with Marcus gives you the reliability of a long-standing name in the world of banking.
Move over traditional brick-and-mortar banks, online banking is here to stay. Online banks, also known as direct banking, are taking the markets by storm.
What began in the 90's has dramatically increased as more and more consumers are turning to the internet to do everything from buying lunch to investing in real estate.
In just a few minutes you can register for an online-only bank and be on your way to upgrading that piggy bank.
Marcus by Goldman Sachs is a somewhat recent entrant into the direct banking world. Back in 2014, Goldman Sachs realized that many consumers wanted a personal loan without the hassle of dealing directly with loan officers.
The company spun off Marcus to help consumers do just that: secure a personal loan online in a fraction of the time.
Marcus continues to be a recognized loan leader, securing the top spot in J.D. Power’s U.S. Personal Loan Satisfaction Study for 2019, defeating 15 other contenders.
The loan arm of Marcus has an A+ rating with the Better Business Bureau.
But not just loans, the company offers high-yield savings and certificate of deposits (CDs) both domestically here in the US and overseas in the UK, where the bank has proven to be exceedingly popular.
For those looking for a Marcus banking app, you’re out of luck for the time being.
Fortunately though, Marcus purchased the personal finance app Clarity Money in 2018. Consumers can sign up for a Marcus high-yield savings account through the Clarity app.
Minimum: 0$ (savings account), $3,500 (loans), $500 (CDs)
Fees: Savings – None, Loans - 5.99% to 28.99% APY, CDs - none
Promotion: Marcus Savings Bonus (limited times only)
What is Marcus by Goldman Sachs?
Marcus by Goldman Sachs is an online bank and sub-division of banking juggernaut Goldman Sachs.
The company is strictly digital and offers a wealth of services including loans, high-yield savings accounts, and CDs. Marcus launched to US customers initially but has spread successfully to the UK.
Direct banks, sometimes called neobanks, branchless banks, or virtual banks, like Marcus are another step in the long list of fintech innovations currently sweeping the globe.
Such banks leverage digital technologies, fintech innovations, and changing consumer interests to offer banking solutions divorced from the physical world.
Online banks (not to be confused with online banking, which you can do with any brick-and-mortar bank) offer better rates and lower fees than traditional banks because they don’t have to have to pay for space.
The downside is that these banks are often new and don’t have any way to meet with a banker or customer service agent faced to face.
As a strictly digital bank, Marcus does not operate any brick-and-mortar banks or ATM networks.
While this may come as a shock to some, the absence of physical locations means Marcus can offer enticing rates for products and services like bank accounts, loans, and other investment products.
Marcus grew out of the retail division of Goldman Sachs, multinational financial services firm known for its investment banking.
In the wake of the subprime mortgage crisis, Goldman Sachs converted to a bank holding company – a company that controls banks but does not engage in banking activities.
The firm created the consumer division in 2014 called Marcus and focused exclusively on offering direct-to-consumer personal loans online.
Later in 2016 Goldman Sachs created a direct bank called GS Bank. From 2014 through 2016 both Marcus and GS Bank operated independently, with Marcus focused on the personal loan and GS Bank on direct banking activities.
The two were eventually merged.
Marcus is a digital-age bank with no branches or tellers. Simply sign up online and in a short amount of time you’ll be banking.
Secured and Unsecured Loans.
Choose from five loan types, with rates as low as 5.99% APY, no fees, maximum up to $3,500, and terms for as little as 3 years.
Industry-busting Savings Account Yield.
FDIC insured account with no fees or minimums, and a 2% APY (as of this writing).
Minimum deposit of $500, deposits from 6 months to 6 years, with rates up to 2.65% APY.
Flexible, No-penalty CD.
Need money? No problem. 3 different fixed-rate CDs where you can withdraw the full balance if needed.
Different Ways to Deposit.
Add funds by ACH, direct deposit, automatic transfers, or by check.
Check balance anytime.
24/7 automated system means you can check your balance any time, day or night.
Get Phone Support.
Need help? Just call and you can talk with someone about your account, Monday through Sunday.
How Does Marcus Work?
As an online-only bank, Marcus is organized around three core offerings that benefit from not having to pay for physical branches.
These offerings include a variety of loan types, a high-yield savings account, and two CD variations.
For those choosing to save with Marcus, either through a savings account or CD, Marcus offers a variety of ways to deposit money into the savings vehicles.
Secured and Unsecured Loans
Marcus started by offering personal loans to consumers exclusively online. This turned out to be extremely popular. The company has both secured and unsecured loans.
Marcus loan benefits:
- Loan amounts from $3,500 to $40,000
- Rates from 5.99% APY to 28.99% APY
- Repayment terms from 36 to 72 months
- No fees
- Borrowers can adjust their payment due dates
- Use loans to consolidate debt, for home improvement, for major purchases, relocations, vacations or weddings
- No-interest and no-fee loan payment deferment after making 12 or more consecutive on-time payments
High-Yield Online Savings Account
Marcus began offering high-yield savings accounts after the success of its loan offerings. Below are the highlights for the savings account.
- 2.00% APY (as of this writing)
- No fees
- No minimum deposit
- FDIC insured
- Account maximum of $1,000,000 per account ($3,000,000 per account owner)
- Transfer limit of $125,000
There are a few important points to note about the high-yield savings account. You can link other bank accounts, like a checking account at a different bank, directly to your Marcus account.
This allows you to set up one-time or recurring transfers to or from your Marcus account.
If for some reason you need support, Marcus offers a call-in customer support number seven days a week, Monday to Friday 8 am – 10 pm E.T. and Saturday to Sunday 9 am – 7 pm E.T.
Certificate of Deposits (CDs)
Marcus offers two distinct CDs, a fixed-rate CD, and a fixed-month no-penalty CD. Let’s take a look at each. CDs are funded by linking your Marcus savings account with an external account or by mailing a check.
Fixed-rate CD details:
- 6-month to 6-year terms
- 0.60% APY to 2.50% APY, depending on term
- $500 minimum, $1,000,000 maximum
- Withdraw penalty-free interest over the term of the CD
- Automatic renewal (after a 10-day grace period)
- Early withdraw penalty if the balance is taken out
- Additional funds can be added for up to 30 days after the initial $500 minimum is met
No-Penalty CD details:
- Fixed 7-month, 11-month, and 13-month terms
- Guaranteed 2.10% APY, 2.05% APY, and 2.00% APY
- $500 minimum, $1,000,000 maximum
- $0 penalty for early withdraw (after initial seven day waiting period)
- No partial withdraws
- Cannot add additional funds after the initial $500 minimum is met
Pros & Cons
- Safe, secure way to slowly grow your wealth (or hedge against inflation)
- Reasonably high yield on the savings account, especially compared to traditional banks
- No minimum and no fees for the savings account
- No monthly fees and few overall fees for most products
- Quick, easy-to-access loan service
- No late fees on loans
- Free one-time payment deferral on loans for eligible customers
- No checking account, ATM network, or money market account
- No mobile app or mobile checking deposits
- No debt or ATM card for savings account
- Loans may not be available for borrowers with limited credit history
How to Get Started With Marcus
Direct banking has made signing up for a savings account or loan a relatively straightforward process. Marcus is no exception.
Customers can create an account or get a loan quote in less than 10 minutes. Let’s walk through the process step-by-step.
Many customers that first come to Marcus will select into one of the two main categories, either borrowing money through a loan or saving money, either through the high-yield savings account or a CD.
If you’ve selected the ‘start savings’ option, you’ll have the chance to review the three different savings products Marcus offers: high-yield savings account, no-penalty CDs, and high-yield CDs.
If you’ve selected the ‘find your loan’ option, you’ll be directed to a form to select the loan type and terms.
If you are creating a savings account, you’ll have the opportunity to choose whether it is one of the three types Marcus offers: high-yield savings, no-penalty CD, or high-yield CD.
The form asks for information such as contact information, employment status, and social security number.
After this, you’ll be prompted to electronically sign documents authorizing creation of the account. You’ll then be able to fund your Marcus account.
If you are requesting a loan, you’ll need to fill out a quick form with personal details and loan preferences.
You’ll then receive an immediate decision regarding your loan.
Should You Give Marcus by Goldman Sachs a Try?
If you find yourself avoiding bank teller lines, then Marcus may be the bank-of-choice for you. Marcus offers customers ease-of-access, a fast-online system, high-yield rates for CDs and savings accounts, and a lighting fast loan system.
The online nature of the bank means they can provide competitive rates for loans, CDs, and savings account interest rates.
The good news for many consumers is that it doesn’t take much to get started with Marcus. Keep your current brick-and-mortar bank and supplement it with Marcus’ high-yield savings vehicles.
No need to keep your money in a low-yield savings account with a traditional bank. You can put your money to work with no extra fees.
For customers looking to borrow, Marcus is a great place to start. While the online loan market is saturated, Marcus does offer a quick quote, a reputable name, and the option to compare prices.
For those looking to consolidate a loan with low-risk savings, Marcus may represent a one-stop-shop that covers all your needs.
Courtney Bower writes about investing, behavior economics, real estate, and psychology. He served as a US Peace Corps volunteer in Ukraine. He is originally from the Midwest.