Goldman Sachs has opened an online bank, offering higher-than-average interest rates on everything, from savings accounts to CDs. Bobbi Rebell reports.
Goldman Sachs is going mass market. Wall Street's premier investment bank has launched GSBank.com, an online bank where mainstream consumers can open accounts for as little as a dollar. The website is offering 1.05 percent interest for depositors - higher than brick-and-mortar rivals like Chase and Well Fargo. Goldman is also offering higher than average CD rates. The move not a surprise. The platform is built on $16 billion dollars of U.S. online deposits it acquired from GE Capital Bank. Regulators have pushed Goldman and other U.S. investment banks to mimic commercial and universal banks by funding more of their assets with deposits from consumers. The idea is that in times of stress, deposits are less likely to disappear because they are federally insured. But it also comes with new challenges: Guggenheim Securities Eric Wasserstrom: SOUNDBITE: ERIC WASSERSTROM, MANAGING DIRECTOR, GUGGENHEIM SECURITIES (ENGLISH) SAYING: "When you get into consumer lending, it is a whole other level of regulatory oversight and scrutiny. So you certainly have that challenge and you certainly have the expansion into business lines where historically they haven't participated and that requires a different kind of operational and risk management frame work." The debut of the consumer bank comes at a tough time for Goldman. The bank posted its weakest results in four years with quarterly revenue tumbling 40 percent.