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Marcus Review: How It Differs From Other Online Banks

In this Marcus review, we will look into how this online bank stands as compared to other banks of the same level in the market.

Marcus Review: How It Differs To Other Online Banks

In a Business Insider article, it says that based on a survey by Finder, which is a banking comparison site, it was found that today, American of all ages are open to online-only banks.

In fact, about 30% of American people have an existing account or are planning to open an account with their preferred online bank.

Currently, according to a Forbes report, there are 58 nationally available online banks in the country. Among these online banks is Marcus, which is what we are going to focus on in today’s review.

By the way, for those who are not that familiar with the term “online bank” yet, it basically refers to financial institutions that operate mainly or primarily on the internet. Also known as virtual banks or internet banks, these institutions allow their users or account holders to manage their accounts using either their mobile devices or their computer anytime and anywhere they are.

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In most cases, online banks do not have a physical branch, which means all banking transactions are made entirely online.

Now, moving back, as mentioned, today, we are going to particularly focus on Marcus, which is an online bank by Goldman Sachs, which is one of Wall Street’s best-known names in investment banking.

We’ll see how this online bank fairs as compared to other online banks out there.

For your reference, we are going to particularly tackle the following:

  • What is Marcus?
  • What does Marcus offer?
  • How to open a Marcus account?
  • Are there fees involved?
  • What to like about Marcus?
  • What not to like about Marcus?
  • Is Marcus safe?

WHAT IS MARCUS?

As mentioned earlier, Marcus is the consumer banking offering of Goldman Sachs, which is one of Wall Street’s best-known names when it comes to investment banking. It was in 2016 when the bank expanded its offering to online banking.

Marcus offers high-yield savings accounts, high-yield certificates of deposit, as well as no-fee personal loans.

Although the online bank is relatively new as compared to other institutions of the same level, as of October 2020, Marcus reported having $96 billion in deposits already.

Marcus was named after one of its founders, Marcus Goldman, and is positioned as a simple and accessible online banking that provides consumers added control over their personal finances.

Furthermore, Marcus has a relatively approachable image that is focused on helping people achieve financial well-being, at the same time helping them become smarter when it comes to handling their money.

Contrary to other online banks out there, Marcus does not offer as many types of financial products. In fact, what they currently have are high rates.

If you are interested in knowing more about Marcus by Goldman Sachs, check this very informative video below by MONEY with Eddie Yoon:

Similar to most online banks, Marcus online bank does not have a physical branch, which means, if you are someone who prefers an online bank with a traditional banking option still, this may not be the perfect choice for you.

Marcus mobile banking app is available on both the App Store and on Google Play, making it available for both iOS and Android users.

By the way, Marcus ranks as one of the best online savings accounts. Also, the bank’s personal loans have been recognized in 2019 by J.D. Power as number one when it comes to personal loan satisfaction.

Marcus is based in the United States and is a member of the Federal Deposit Insurance Corporation (FDIC), which means all funds deposited into Marcus’s accounts are insured by the federal government for up to the maximum amount allowed by the law.

WHAT DOES MARCUS OFFER?

In the last section, we have provided you some of the most important information about what Marcus is all about.

This time around, in this part of our Marcus review, we are going to look deeper into what this online bank has to offer.

Currently, Marcus offers a very simple line up of products, which include:

  • Savings Account
  • Certificates of Deposit (CDs)
  • Personal Loans

Savings Account

Marcus offers an online savings account — a classic online bank account that comes without fees, and a high annual percentage yield (APY).

On one hand, while most banks say that they do not charge monthly fees, Marcus, on the other hand, explicitly says that account holders need not pay fees for this particular type of account.

This basically means, no monthly fees, no service fees, as well as other fees usually charged by other online banks.

Furthermore, Marcus Savings Account does not have a minimum deposit requirement. They do have, however, a maximum limit of $1 million per account and not to exceed $3 million per account owner.

Meanwhile, it is important to note though that while Marcus does not charge fees when an account holder exceeds the withdrawal limit, the bank may, however, close the account. So, account holders must be very careful with that.

Now, when it comes to rates, the rate offers by Marcus is quite attractive. In fact, the bank has better terms of interest rates as compared to most big banks in the country.

Currently, Marcus pays a 0.50% APY.

Based on the characteristics of Marcus Savings Account, we got to say that this type of bank account is ideal for keeping an emergency savings fund, or if you want to save up for a particular financial goal like a family vacation, a new car, home renovations, etc.

Certificates of Deposit (CDs)

As mentioned, another product offering of Marcus is Certificates of Deposit (CDs). This online bank offers a couple of different types of CDs, which include:

High-Yield CD

Marcus’s high-yield Certificates of Deposit allows consumers to lock in a relatively high rate for a particular length of time.

More so, what is nice about it is that the online bank offers a 10-day rate guarantee, which means if Marcus raises rates within 10 days after the consumer opens a CD, he or she automatically get the higher rate.

The high-yield CD is available for a minimum deposit of $500. As mentioned, it comes with a fixed rate of return depending on the term you choose.

Marcus’s high-yield CD terms range between six months and six years.

Similar to most CDs offered in the market, Marcus’s high-yield CDs charge a certain fee for early withdrawals. Keep in mind that CDs are meant to stay long in the bank. It should be untouched for a certain period of time. However, if in case you need the money, you may withdraw it but, as mentioned, with a cost.

The early withdrawal penalty amounts to a certain number of days’ worth of interest.

No-Penalty CD

If you want to stay away from getting charged with an early withdrawal penalty at the same time still earn a high APY, the no-penalty CD is ideal for you.

With this type of account, you can withdraw the funds without penalty any time after seven days. You still get a guaranteed rate, though, for the full term of the CD.

No-Penalty CD terms available are seven months, 11 months, and 13 months. You can earn 0.45% with a seven months term, and similar to the other CD account type, the minimum deposit required is $500.

What is nice about this particular CD type is that it allows you to lock in on a great APY, at the same time, you have the flexibility to withdraw the funds seven days after funding without having to worry about penalties.

The No-Penalty CD is ideal for holding emergency savings, or for saving up for a specific financial goal (such as family getaways, home improvements, special occasions, etc.), or any other savings goal you have in mind.

Personal Loans

Another product offering by Marcus is Personal Loans, which can be used for various purposes. It could be for paying off credit card debts, for home improvements, or for other financial goals.

What we particularly like about this product is that Marcus offers no-fee personal loans for amounts of up to $40,000, with APRs that range between 6.99% and 19.99%.

The online bank’s personal loans have flexible loan terms that range from 36 to 72 months. Furthermore, you can also avail of a reduced APR by 0.25% if you sign up for auto-pay.

Please note, though, that all loans are subject to credit approval. More so, your monthly payment will depend on the interest rate, loan amount, as well as loan term.

Marcus personal loans have consistently received high marks from J.D. Power (as mentioned earlier) in its yearly consumer Satisfaction Studies. The said study measures customer satisfaction based on four key areas, which include application and approval process; billing and payment; interaction; and loan offerings and terms.

HOW TO OPEN A MARCUS ACCOUNT?

So, now that you already know what Marcus is all about and the products it offers, this time, let’s talk about how to actually open a Marcus account.

The process is pretty simple and easy —

Anyone in the United States can apply for a Marcus account online by providing an email address and a mobile phone number.

To be eligible to open an account, you must be more than 18 years of age, and a resident of the United States (for tax purposes). Also, similar to any financial institution in the country, Marcus online bank will also ask you to provide basic personal information to complete your bank account application.

Your Marcus account is accessible and manageable online, and you also have the option to speak to the Marcus team over the phone through 1-855-730-7283.

Meanwhile, once you are done processing your account application, the next step would be funding your account.

To add funds to your Marcus Online Savings Account, all you need to do is transfer the money from a linked account. Unlike other online banks though, this is the only way you can top up your account.

Now, to be able to do this, you will need the sort code and account number of your Marcus Online Savings Account.

ARE THERE FEES INVOLVED?

There are a lot of online banks out there, but they differ from each other in different ways. One of the common differences though is fees and charges.

With Marcus, as we have mentioned earlier, for its Online Savings Account, customers can expect the following:

  • No Monthly Fees/Maintenance Fees
  • No Service Fees
  • No Transaction Fees

Furthermore, the online bank does not charge for when an account holder exceeds the withdrawal limit. However, the bank may close the account.

As with Marcus’s High-Yield Certificates of Deposit (CDs), it does charge an early withdrawal penalty, which amounts to the specific number of days’ worth of interest.

Meanwhile, for the bank’s Personal Loans, Marcus offers no-fee personal loan amounts specifically for the borrowed amounts of up to $40,000.

Generally, we got to say that online banking with Marcus allows you to save a lot of money as compared to other banks of the same level.

WHAT TO LIKE ABOUT MARCUS?

As we always say, every institution has its share of pros and cons. For Marcus, some of the things we particularly like are as follows:

  • No Minimum Deposit Required – With Marcus, customers do not need to spend masses of cash. Even with just a few bucks or nothing at all, you can open a Marcus account.
  • High-Yield Account – Marcus has a very impressive annual percentage yield (APY). The rates are absolutely competitive as compared to other online banks out there.
  • No Bank Fees – Contrary to many online banks out there, Marcus does not charge anything (unless stated). Marcus does not charge monthly maintenance fees, transaction fees, service fees, and other fees usually charged by online banks.
  • Low Minimum Deposit for CDs – Marcus only requires at least a $500 deposit for its Certificates of Deposit accounts.
  • Award-Winning Personal Loans – Marcus’s personal loans consistently received high marks from J.D. Power (as mentioned earlier) in its yearly consumer Satisfaction Studies.
  • 24/7 Mobile and Online Access – Since Marcus is an online account, it gives consumers 24/7 access to their accounts.
  • FDIC-Insured – Marcus is an FDIC-insured online bank, which means, in the event that the bank fails, all depositors’ money is insured for up to $250,000.

WHAT NOT TO LIKE ABOUT MARCUS?

Surely, Marcus does have its share of good qualities. But as we always say, there is no such thing as a perfect online bank. It does have its share of cons.

Some of the things we do not like about Marcus is as follows:

  • No Physical Branch – Just like a lot of online banks in the market today, Marcus does not have a physical branch, which makes it not ideal for people who opt to have a more traditional banking experience.
  • No Checking Accounts – Unfortunately, Marcus does not offer to check accounts yet. However, there is news that the bank is planning to launch its checking account product in 2021. We look forward to it!
  • No Cards– Another downside of Marcus is that it does not have cards. Marcus offers an entirely online savings account. Thus, no card is available as of this time.
  • No Mobile Check Deposit – Apart from the fact that it does not have a checking account, Marcus does not have mobile check capabilities as well.
  • Limited Mobile App – If you are someone who’s keen on digital banking app features like spending notifications and savings tools that allows you to manage your funds better, Marcus may not be the right choice for you. The Marcus mobile app is literally simple and straightforward.

IS MARCUS SAFE?

Our Marcus review will not be complete without us answering the question if the bank is safe.

To answer, yes, Marcus online bank is safe.

Marcus by Goldman Sachs is an FDIC-insured online bank, which means that all account holders’ money is insured by the federal government for up to $250,000. So, in the event that the bank fails, you are assured that your money is safe and secured.

FINAL THOUGHTS ON THIS MARCUS REVIEW

Marcus is an online bank that is created by one of the most trusted names in investment banking, Goldman Sachs.

With that alone, customers are insured that their money is safe and secured. Needless to say, the best service possible.

Although Marcus does have its share of downsides, we thought that eventually, these downsides will be addressed, and in due time, Marcus will be able to provide an excellent entirely online banking experience.

Overall, we got to say that the quality of what the online bank offers are pretty much impressive.

Marcus offers the best APYs for both a high-yield savings account and a high-yield certificate of deposit in spite of the fact that the bank has low requirements for minimum deposits as well as no-fee accounts.

With all that, do you think Marcus is the right online banking institution for you? We hope so.

To end, we hope that this Marcus review has given answers to some of the most commonly asked questions regarding the bank and that it provided clarity as to how it fairs as compared to other online banks out there. Just to say, it did fair well.