Goldman Sachs announced they will be raising their interest rate on savings accounts to 1.2% from 1.05%, with hopes of increasing deposits by customers.
The national average rate is only 0.06%. With $128 billion in overall deposits, Goldman Sachs also significantly trails other large consumer banks for customer deposits.
This hike in return rate in order to increase deposits is an attempt to increase profits for Goldman Sachs if they can determine how to lend them profitably.
Do you believe this will be a successful strategy for the bank?
I actually think it will be. Currently, I have a savings account with Ally Bank (known for offering high interest rates), but they're only offering 1.05% right now. I wouldn't switch for just 15 basis points, but had Goldman done this a year ago when I was looking to open an account, I totally would have gone with them.
It made me open a savings account with them few months back, they save money by having zero physical locations and no mobile app, and then pass savings on to costumers. Just have to do everything electronic. Awesome business model honestly.
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