Marcus of Goldman Sachs has just raised its interest rate on savings to 1.00%
Marcus, the online banking division of Goldman Sachs, just crossed the 1% APY threshold on its high-yield savings account.
The bank’s rate hike on Wednesday follows the Federal Reserve’s decision last week to raise interest rates in its continued effort to fight inflation. Marcus previously offered an annual percentage yield (APY) of 0.85%, and this week increased the yield to 1%.
Marcus is one of the first online banks we’ve seen raise interest rates following the Fed’s decision, but the experts we spoke to expect more banks to follow suit. While it’s important to note that rising rates also mean higher mortgage rates, higher APRs on credit cards, and a general increase in the cost of borrowing, you can benefit from higher APYs on savings accounts and CDs. The Fed is also expected to continue raising rates in the coming months, meaning savers can benefit from even higher interest rates as 2022 progresses.
Here’s why Marcus’ online savings account is one of our favorite high-yield accounts available today, and what you can get with a 1% APY on your savings:
How much can you earn with Marcus’ 1% APY?
Marcus’ new APY offer increases interest for savers by 0.15%, from 0.85% to 1.00%. Here’s what a difference it can make to your savings:
Let’s say you have $5,000 in an emergency fund with Marcus. At 1% APY, you could earn $50 in a year, even without making any other contributions. At Marcus’ previous 0.85% APY, you would earn $42.50 over the same period.
An extra $7.50 over an entire year isn’t the highest amount, but the extra interest accrues over time and as you add more money to your savings.
For example, suppose you not only put the $5,000 into your account, but also contributed $100 each month to your savings. Here’s how your balance would grow over the 12-month period given different APYs, including the national average of 0.08%:
|Marcus Online Savings Account 1.00% APY||Previous Marcus Online Savings Account 0.85% APY||Average national savings rate of 0.08%|
|Monthly contributions of $100 + interest||$1,256.75||$1,248.21||$1,204.52|
|Balance after 12 months||$6,256.75||$6,248.21||$6,204.52|
In this example, you could earn over $52 in extra interest in a year just by choosing a high yield account at 1% interest rather than a traditional savings account at 0.08% .
Why We Love Goldman Sachs’ Marcus
Marcus is a great option for online savings and is on our list of the best high-yield savings accounts.
Not only does the Marcus online savings account offer a competitive APY of 1.00%, it also charges no monthly fees and requires no minimum deposit or balance. There is no limit to the number of withdrawals or transfers you can make, and you can set up automatic transfers from another account regularly.
Marcus has an app you can use to manage your account and offers high-yield, penalty-free CD options in addition to its high-yield savings account.
We think Marcus is a great savings account option, but there are other high-yield savings accounts with higher APYs on the market today. Here are some additional options to consider if you’re looking for a new savings account:
Remember, the most important thing you can do to maximize your savings is open an account and start contributing. Look for an account that matches your savings goals and offers a competitive rate to help you earn a few extra dollars on your balance with no fees. Then, make regular contributions to meet your emergency fund number or other short-term savings goal. Then you can focus on other financial goals, like saving for retirement or paying off debt.