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I have a high-yield savings account and several CDs at Marcus bank, owned by Wall Street powerhouse Goldman Sachs and named after one of its founders, Marcus Goldman. I originally discovered Marcus bank while perusing rankings on bankrate.com.
Marcus is an online bank and a member of FDIC. All accounts are insured up to $250,000. Marcus charges no monthly fees. There is no minimum balance to open a high-yield savings account, but a minimum balance of $500 is required to open a CD. Interest is compounded daily and reported monthly. In fact, you begin earning interest as soon as your deposit is received.
The yields on my accounts are competitive with the offerings from other banks. For example, as of this writing, both American Express and Capital One offer high-yield savings accounts with an APY of 4.25%. Currently, my Marcus high-yield savings account sports an APY of 4.40%.
One drawback: Marcus doesn’t offer checking accounts. You can link your Marcus account to an external bank account to move your money via electronic funds transfer. I linked my Marcus account to my Capital One checking account. I’ve also linked TreasuryDirect to my Marcus savings account to purchase or redeem T-bills.
Other potential drawbacks: Marcus does not participate in the Zelle network nor does it have an ATM network. I depend on my Capital One checking account for these features.
Because Marcus is not a full service bank, it’s usefulness is limited to anyone wanting to take advantage of its savings products.
I’ve found the Marcus web site to have a professional, uncluttered appearance which makes it easy to navigate.
If you’re looking for savings products with good yields, you may want to consider Marcus. For more information, simply point your browser at marcus.com.
When the Fed lowers the Federal Funds rate, the yields on savings accounts and money market funds will decline. CDs yielding 5% or more will continue to pay that rate until maturity. Thus, CDs can act as a hedge against declining rates. It is a way to pick up a few more basis points of return if you’re willing to move some money around.
Everbank (formerly TIAA Bank) is currently paying 5.05% for online savings (FDIC insured) and has checking and Zelle.
Similarly, I’ve been using Ally, although they have not been as competitive over the last year compared to Marcus. Previously, they had better CD rates (specials) which had superior APYs. But that is no longer the case. As CDs mature, I have been moving the money to Vanguard’s money market fund (VMFXX), like Jonathan mentioned, as it gives a solid rate (currently 5.27%) and has flexibility to move funds when needed.
I use FIDELITY GOVERNMENT MONEY MARKET (SPAXX) for cash. It currently yield 4.97%.
Concur! Here’s a tip (“hack”) for Fidelity fans, of which I am one. If you can come up with $100k on a short-term basis, switch to the Fidelity Government Money Market Fund Premium Class FZCXX or the slightly riskier Fidelity Money Market Fund Premium Class FZDXX. Then, after it’s open, you can draw it down to $10k without Fidelity closing the account on you. This minimum to keep the account open is detailed in the prospectus. Essentially, it’s $100k to open but only a $10k minimum to maintain the account. The fees are lower and yields higher. The other great benefit of Fidelity versus Vanguard or Schwab is that you can sweep ALL of your money into their money markets and they automatically pull drafts out of the M/M fund. That is, you don’t need to keep a bank/free cash balance to service drafts from the account.
I have a money market account whose assets represent my cash flow needs for the next two years and a checking account for ongoing expenses. How would a saving account benefit me?
When you say money market account, do you mean an account from a bank — or a money market mutual fund? If it’s the latter, you aren’t covered by FDIC insurance, which you’d get with a bank savings account and which some consider important.
But, to be honest, I don’t. I’ve never bothered with the hassles of a separate online savings account and with chasing higher yields on my cash. Instead, I keep whatever spare cash I have — not much — in Vanguard’s main money market fund. That isn’t getting me FDIC insurance. But frankly, if the Vanguard fund “broke the buck,” we’d all have much bigger headaches to worry about. It would be a sign the economy had major problems and the stock market would no doubt be down big time. So, my money market fund went from $1 to 99 cents a share? That wouldn’t be my biggest concern.
Since GS is pulling back from all its recent consumer sector investments, I’m not keen to explore this.