Goldman Sachs Just Raised the Interest Rate it Pays on Savings Deposits to the Highest in the Country

Goldman CEO Lloyd Blankfein

Goldman Sachs Bank USA, has raised the rate it offers customers on savings deposits to 1.2 percent.

Goldman had previously offered savers 1.05 percent. The average national rate for savings accounts is currently 0.06 percent, according to the U.S. Federal Deposit Insurance Corporation. Most large banks pay a rate of only 0.01 percent.

The move makes Goldman the highest interest paying bank, according to personal finance website Bankrate.com.

From Goldman's webpage:

There can only be one explanation for this, Goldman wants to become a major player in the individual savings account business.

At present, Goldman's online deposits from individuals total $12 billion, a small but growing fraction of the $128 billion in overall deposits on the firm's overall balance sheet. But it  is far less than large commercial banks like JPMorgan Chase & Co with $1.4 trillion in deposits.

Interest rates overall are still terribly low but this signals that Goldman will probably continue to lead the pack as rates climb.

Accounts at Goldman are insured by the FDIC up to the legal limits.

 -RW