Introduction
Marcus by Goldman Sachs and Ally are at the top of the game regarding online banks. While the Wall Street giant Goldman Sachs founded Marcus, the latter was introduced in 2009, meaning Ally has much more experience in the online banking industry.
Even though Ally has been a part of the online banking sector for a long time, Marcus has managed to catch up to it due to many factors, which we will discuss in this article.
These online banks offer high-yield savings accounts with top-tier benefits. A detailed analysis comparing both platforms is needed to better understand why they stand on top of the online banking industry and their respective contribution in the digital payment trends in the near future.
We have conducted extensive analysis and research on the type of accounts both online banks offer. This article will discuss the concept of a high-yield savings account in more detail.
Furthermore, we will highlight some of the pros and cons each bank offers, after which we will compare their accounts so that you can better understand what is best for you.
What is a high-yield savings account?
Before understanding how these online banking platforms compare to each other regarding savings, it is important to first look at the concept behind high-yield savings accounts and what they do.
The defining quality distinguishing a high-yield savings account from the other types of savings account is that the funds stored in this account earn more interest than an average savings account.
This means that when opting to go for a high-yield account, depending on your bank balance, you will receive a higher-than-normal return amount than conventional banks, resulting in more interest income and an increased amount of funds paid to you each month.
Additionally, another plus point that high-yield savings accounts tend to have, and a reason why many customers tend to opt for this, is because it involves lesser fees and almost no hidden fees as well.
Furthermore, high-yield accounts have a lesser minimum requirement to open an account than a normal savings account.
Ally vs Marcus by Goldman Sachs: The Pros and Cons
Ally
The Pros
- Customer Support. One very useful advantage of Ally is that the platform has a dedicated customer support team that is present 24/7 to cater to any problem you may have. Furthermore, they can be reached by both phone and live chat.
- Variety of Different Accounts. Not only do they offer consumers the option to open up a savings account, but the platform also allows them to sign up for checking and CD-based accounts.
- Additional Financial Services. Other than providing many account options to the consumer, Ally offers other financial services, such as offering loans, allowing you to open investment accounts, and helping you with your mortgage needs.
The Cons
- Cannot Deposit Cash. Although Ally offers many payment methods to make online payments, unfortunately, cash is not one of them, meaning that you cannot deposit cash into your Ally account.
- Lack of any physical locations. Despite being one of the most famous savings banks in the market, Ally is based solely on the digital landscape, with no branches you can visit.
Marcus by Goldman Sachs
The Pros
- Customer Support. Although this platform does not have the option to reach customer support by phone, they have a dedicated team of representatives who are available 24/7 over live chat and are extremely helpful.
- Marcus Insight. One unique feature that this platform offers its users is the insight feature, which essentially allows you to track all of your spendings and monitor your monthly cash flow through the online banking app.
- A+ Rating. The better business Bureau is a well-known private organization whose main purpose is to review various businesses and gives them a rating according to different factors. This organization has given Marcus an A+ rating.
The Cons
- Limited Account Varieties. One setback that has negatively impacted Marcus’s business is the lack of different account types available to the consumer. Although Marcus offers great schemes for opening a savings account, it does not offer customers the option to open a checking account.
- No Mobile Check Deposit Feature. One of the conveniences of having an online banking app on your phone is that it gives you the liberty to check your account balanced from your phone. However, Marcus by Goldman Sachs does not offer such a feature, negatively impacting user experience.
Comparing Savings Accounts
Because high-yielding savings accounts offered by many banks differ due to the different layers of protection and the different offers that they provide, there are a couple of key features which need to be considered when comparing Ally vs Marcus by Goldman Sachs.
This includes the Minimum deposit required to open an account and the varying amount of APY, known as annual percentage yield.
Minimum Deposit
Regarding the minimum deposit needed, both online banks are similar in this regard, with no minimum deposit requirement.
APY Offered
Before discussing what percentage APY Ally and Marcus offer with their savings accounts, let us first discuss what this is used for and why you should consider it.
APY is short for Annual Percentage Yield, and how it works is that this percentage rate is used to represent the interest rate for the actual return, which you would be receiving at the end of each year in the form of interest income.
Due to this, the more APY offered by a bank, the better for the account holder because it means more money would be landing in their high-yielding savings account, and in this case, the APY offered by Ally is a rate of 1.25%, and Marcus offers 1.30% APY.
Additional Fees
In addition to offering a higher APY than conventional banks, another great selling point of Marcus is that there are no additional fees attached to opening an account with them.
However, Ally charges an additional $25 for an overdraft and other fees, such as a $10 excessive transaction fee.
What Marcus Does Best?
Regarding Marcus, what this online banking platform does best is that it offers premium services with great investment potential.
Marcus shines as an online lending and banking platform by offering features like incredibly high-yielding savings accounts, Certificates of Deposit, different investment options, and a wide variety of loan options.
Due to this, Marcus by Goldman Sachs is the best option if you are not looking for a checking account or an individual looking for an online bank where you can make large deposits.
What Ally Does Best?
There are a couple of aspects where Ally falls short when compared to other online banking platforms, such as Marcus, but there are many reasons why this app is considered to be one of the most famous online banking apps in the market.
Whether it is the extensive list of different account types, such as the ability to open a savings account or checking account, or access to a great amount of different financial services, such as mortgage services, and different types of personal and auto loans, Ally offers a vast library of different financial services which set itself apart from the competition.
Due to these traits Ally possesses, this banking platform would work best for you if you are in a situation where you want your savings and checking account to be within the same bank or need help on a possible mortgage through your credit card.
Conclusion
Both of these banks offer different financial services and rates when it comes to not only opening up a savings account but also offering other financial services, which is why there is no one best platform to invest in. Marcus and Ally excel in different categories, which is why determining which bank is the most suitable largely depends on your situation and your preferences when researching the market to open a savings account. Consider the information in this article before you open either of these accounts and make sure to do additional research before making a final decision.
