Goldman’s Marcus Hikes High-Yield Interest Rate To Highest On Record

The bank’s flagship product will now return 2.5% each year, up from 2.35% previously, according to its website. As the Federal Reserve has tightened monetary policy this year to battle inflation, interest rates on savings accounts have jumped as well, with competitors vying to offer the most attractive returns. 

High-yield accounts gained popularity in recent years as a way to earn more interest on cash than through traditional savings accounts, while still keeping holdings liquid. With stocks and bonds both plummeting this year, many investors have flocked to cash and sought out places to store it while still generating income. 

Competitors including Barclays Plc and Ally Bank have also been raising rates, currently offering 2.4% and 2.35% for their high-yield savings accounts, respectively. The higher rates, however, are still well below the rate of inflation.

The new rate for Marcus is a big jump from the depths of the pandemic, when central banks slashed interest rates and the bank cut its annual percentage yield to 0.5% at its lowest. That figure returned to pre-pandemic levels in August and has continued climbing from there. 

Marcus has been in the spotlight in recent weeks, and Goldman’s Chief Executive Officer David Solomon plans to shift focus away from the money-losing consumer unit. 

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