- Jin Lee/Business Insider
- Marcus, Goldman Sachs’ Main Street banking arm, is cutting interest rates on savings accounts from 2.25% to 2.15%.
- Marcus follows Ally, which is the only other high-yield savings account that has cut its rates. This is the first time rates have been cut for either account.
- The move comes after the Fed decided not to cut interest rates last month, but hinted that rate cuts will come later this month.
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Customers flocked to Goldman Sachs’ digital bank Marcus because of its super-high savings rates. Now, the bank is pulling back in preparation for a potential rate cut by the Fed.
Goldman told Marcus customers last Thursday it would be dropping rates from 2.25% to 2.15%. For every $1,000 invested in a Marcus account, this change will cost a customer only about $1 a year in interest.
Marcus was launched in October 2016. The service, named after one of Goldman’s founders, Marcus Goldman, offers fixed-rate, no-fee consumer loans and a high-yield savings account. A savings account was launched in the UK in 2018.
Marcus joined a competitive field of other high-yield savings accounts with minimal fees, but quickly established itself as one of the most popular. By late 2018, Marcus had amassed $35 billion in deposits.
Marcus’ interest-rate cut was preempted by competitor Ally, which announced a rate cut from 2.2% to 2.1% last Tuesday. This is the first time either bank has cut interest rates since launching. At the time of writing, no other high-yield accounts have cut their interest rates thus far.
The move comes after the Fed decided not to cut interest rates last month, but hinted rate cuts will come later this month. CME’s FedWatch has rated the likelihood of a rate cut as 100%. By preemptively lowering their rates now, Ally and Marcus are protecting their profits in advance of when the Fed’s rates likely fall.
According to a statement provided by Goldman spokesperson, the cut was a result of “market conditions.”
“Our online savings account remains more than 4X the national average,” the spokesperson said.
Goldman also cut interest rates on Marcus’s certificate of deposit (CD) products, following a general trend among CD providers. According to a survey completed by DepositAccounts, CD rates have been falling across the board, including at Marcus’s competitor Ally.