Goldman Sachs Group Inc.’s consumer bank Marcus lowered the rate on its high-yield savings account for the first time in more than three years as investors are laser-focused on when the Federal Reserve will cut its lending benchmark.
The bank’s flagship product now offers a 4.4% annual percentage yield, down from 4.5% in March. It’s the first cut since November 2020, when Goldman lowered the rate from 0.6% to 0.5%, according to Bankrate.
The move signals that financial institutions are on alert for when they can lower interest rates for individuals after the Fed’s most aggressive tightening cycle in a generation. As the central bank raised its short-term rate, increasingly popular high-yield accounts had to do the same to win savers’ cash.
Short-term interest rates are expected to fall when the central bank lowers its benchmark. Fed officials last month penciled in 75 basis points of rate cuts this year — though Minneapolis Fed President Neel Kashkari on Thursday floated the possibility of none in 2024.
“Our current rate places us ahead of the majority of our peers,” a Goldman spokesperson said in an email. “We will continue to focus on providing value to our customers and growing our Marcus deposits business which is a priority for the firm.”
This article was provided by Bloomberg News.