For a while now I have been eyeing some finance influencers who have given great reviews and increasing annual percentage yields (APY) from Goldman Sachs online bank called Marcus. I did a lot of research and compared other online banks that had comparably rated for their high yield savings accounts. I also did some research on other big banks and was very disappointed. They had super low rates and only offered other saving options that also offered pretty low returns. Some of the credit unions I saw were right in the middle of with good saving options and bank availability, but I was still more impressed by the saving options these online banks offered compared to having a local bank branch. I personally never go into the bank and do everything online. So I was convinced that switching my never touched emergency fund to a high yield savings account and get some interest back was worth my time. Here are some of the questions and experiences I ran across when making the big switch.
My Minimum Banking Requirements
I started doing even more research on other online banks to compare which bank I wanted to move my emergency fund. My minimum requirements that I needed was security, reliability, and high yield savings account. When I was reading up on their security I felt comfortable since Goldman Sachs is a pretty well-known name in the financial services industry and that they are FDIC insured. The trick that I learned about FDIC insurance is that the government will ensure your money up to $250,000 per account. Since I don’t have $250K, I am sure the money I do put into this account will be protected and covered by the government. This is definitely something everyone should double check with all banks. For reliability, I need an easy money transferring process, especially if I need my emergency fund quickly and safely. I did read that I was only able to pull money from their high yield savings account about 6 times a year. This didn’t bother me since I don’t usually have more than 6 emergencies in one year. Most of the online banks that offered a high yield saving account have APYs ranging from 1.00-1.80%, with Marcus bank being the highest. I also checked out how many times they change their yields during the year and it has gone up a few times. This has its pros and cons, but at least they are being realistic with what yields they can actually provide depending on how their business is doing.
How can Marcus Online Bank offer such a high APY compared to big banks?
You might be asking yourself well how can these online banks offer me higher yields when I don’t have the luxury of not having a local branch to go to. That’s exactly it! These online banks get to save tonnes of money by not having a physical branch, which actually cost these banks a pretty penny to own or rent. Just also re-track and think about how all banks make money. The way all banks offer you some kind of interest for how much you have in your saving account is by lending your money to other customers for home loans, car loans, and any other typical bank loans. They charge people who need loans interest and the bank makes huge profits, while you make pennies at the end of the year. These online banks are saving money on not having a physical location and are lending out specific loans with a specific amount of risk. For example, I did notice that Marcus bank had very very specific loans that they offered as home repair loans. Most of the people requesting a loan from Marcus bank are homeowners or investors trying to upgrade their property to enjoy or resell. This would be considered a low-risk loan because the borrower is looking to invest in their home to sell at a higher price usually.
How does Marcus bank compare to other online banks and their APYs?
One thing that did make it hard to decide which online bank to pick was all of the similar benefits. They all offered no or low fees, easy user experience, other banking options, and high-quality customer service. A lot of people were satisfied with their service and the benefits these online accounts offered compared to their big banks. A few of the top competitors were Ally, Barclays, Discover, and Synchrony. Some of the top benefits were no minimum deposit, no monthly fee, and of course the best one is the high savings account yields.
My experience switching to Marcus Bank
So here is my true experience with switching my emergency fund over to Marcus online bank. It took me a little less than a month to do it. I am a super busy mom and entrepreneur, I set time during my kid’s naps to do all of my To-Do’s for the week and sometimes I don’t even get to them.
My first attempt was simply opening the account and trying to do an ACH from my Fidelity account to my new account. Since Fidelity isn’t a traditional bank I couldn’t connect my accounts directly, so I had to do an automatic clearing house (ACH) transfer. This is just a fancy way of saying an electronic financial transfer. I clearly read that it would take 3-5 business days and they will do a test deposit of a few cents into my account to make sure it is the right account. I liked this very much, usually, they take a few cents out but they did the opposite and put a few cents in. I waited and didn’t see any transaction that week.
My second attempt, I logged into my Marcus bank online and noticed that my ACH was blank. It was not pending or even their. I re-entered all of my banking information and in a few days, I did see two deposits into my Fidelity account. A few days later I tried to verify the amount of the deposits and the system kept telling me the amounts were incorrect. I got a bit frustrated and gave up for the week. Pretty pathetic I know, but I didn’t have time that day to call customer service. At this point, my husband started asking me if I transferred the money yet and he couldn’t stop laughing at me that I still haven’t completed it. I kept it on my To-Do list for next Monday to call and see what was going on.
My third attempt, I noticed when I logged back in I verified that my ACH failed and didn’t connect. So I re-entered all of my account information and it said to keep an eye out for an email that they deposited money into the account to verify the account. I did get the email and waited since I didn’t have much time during the week to follow up on it. When the week was coming to an end I tried verifying the two deposits and it wasn’t working. I called their customer service and they said they didn’t even see any ACH scheduled at all. I thought it was a bit weird since I did get two deposits. So she walked me through and we attached a new ACH from my Fidelity account. She said I would get an email and she explained that the verification of the deposits didn’t expire so not to worry about it if I didn’t get to it right away. After a few days, I got two deposits from Goldman Sachs and I re-tried to verify the deposits and it thankfully it worked. I was able to verify my account and transfer my desired amount into the account with no problems.
I am glad this is all behind me and now I can continue to grow my emergency fund as I see fit while getting a high yield. Even though I had a hard time connecting my accounts to the Marcus online banking platform that doesn’t necessarily mean that you will have the same experience. I would say even if it takes you a few times to get your money into a high yield savings account it will be worth it in the long run. I hope my honest review of my search for a good high yield savings account motivates you to get the most out of your savings account as well.