Goldman Sachs has officially entered the world of online retail banking.
On Tuesday (April 26), various media outlets reported that the investment bank is expanding its customer base with the launch of its own FDIC-insured, Internet-based savings bank called GS Bank.
The minimum account balance needed to start a GS Bank account is only $1 and is open to anyone with an Internet connection.
TechCrunch also noted that the bank’s interest rate will provide customers with an annual yield of 1.05 percent, far above the average U.S. savings bank annual yield of .06 percent.
The platform was reportedly inherited by Goldman Sachs after its recent acquisition of a $16 billion book of deposits from GE Capital. According to Financial Times, the deal provided Goldman with nearly 145,000 retail depositors, allowing the bank to open up “a different avenue to use, with a different orientation and a different tenor,” Goldman Chief Strategy Officer Stephen Scherr said.
“This transaction increases the funding diversification and strengthens the liquidity profile of Goldman Sachs and GS Bank,” Robin Vince, treasurer of the Goldman Sachs Group, said in a statement earlier this month. Vince called accepting deposits a “strategic priority” for the company, which is now in its fourth quarter of profit decline.
Pushing into mass market banking is just the latest new venture Goldman has pursued.
Last year, Goldman jumped into the mobile phone software business, by turning what was once just a collection of software for mobile phones developed in-house into a separate venture of which the company will hold a minority stake.
Synchronoss Technologies, a publicly traded software firm, manages the venture and leverages Goldman Sachs’ technology programs, called Lagoon and Orbit, to create advanced mobile solutions. Lagoon enables secure access to business applications from an employee’s mobile device, while Orbit is a collection of applications that support email and other services for remote use.