In the past, you needed at least US$10 milion to become a Goldman Sachs client.
With the launch of GS Bank, a customer can open an online savings account with the bank for as little as US$1.
GS Bank offers depositors an attractive rate of 1.05 percent, second only to the 1.11 percent offered by Dime Savings Bank of Williamsburgh.
It’s a lot more than the meager 0.1 percent offered by big lenders like Bank of America and Wells Fargo.
Lower labor costs and savings from not having any physical branches explain why GS Bank can offer the high deposit rate.
GS Bank was launched after Goldman Sachs completed the acquisition of GE Capital Bank’s online business.
And this is not the only retail finance business the firm has bought or is building.
In March, Goldman Sachs acquired Honest Dollar, a Texas-based startup that serves small businesses looking to set up retirement savings programs for staff.
Honest Dollar mainly sells retirement plans consisting of portfolios of low-cost exchange-traded funds.
Goldman Sachs is also said to be planning a new lending arm dubbed Mosaic.
Apparently, as its traditional businesses offer limited growth potential, Goldman Sachs is looking for fresh opportunities through serving the banking and retirement savings needs of small businesses and the average American.
This article appeared in the Hong Kong Economic Journal on May 6.
Translation by Raymond Tsoi
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