The Marcus banking app, named after Goldman Sachs founder Marcus Goldman, represents a significant challenge to the traditional way we do online banking in this country. Marcus joins rival banking app Dave and smart speaker Alexa in the unsettling trend of companies adopting human first names for their marketing.  

Their business model does away with physical baking locations, ATMs, and even checking accounts (for now). Instead, Sachs executive Adam Dell plans to draw customers by offering ideal rates on savings accounts, CDs, and small loans, then expanding Marcus’s offerings from there. In January this year, Mr. Dell - with the help of Clarity Money executives, a personal finance start-up Goldman Sachs acquired - introduced Marcus to the world with little fanfare. Despite the near media silence about the app, Dell already had big plans. “Our aspiration is very clear,” he told CNBC, “We want to build the best digital banking experience that any customer can have.”

Thinknum’s data shows a notable but not-crazy uptick in App Store rating count since Marcus’s launch. Marcus had 10k ratings in March 2020 and has climbed to 34.7k at the time of writing. 

Almost half a year after the soft launch, we decided to look into the app to see just how good Marcus’s digital banking experience is.

🤿 Deep Dive

I’m sorry to report that there isn’t much to the app... yet! The main suite of features, high-yield savings accounts, CDs, and business loans - are the basis of the entire business, and we will get to them in the next section. 

But first let's talk about the mise en scène. 

On the Marcus homepage, quotes from philosophers and simple truisms abound. Some really bottom-tier Seneca quotes on display here make the old man sound more boring than he actually was. Surprisingly the quotes have hardly anything to do with finance or banking, two professions in which bloviating phrase-coiners are plentiful!

If Goldman wants to pay a competitive rate for someone to find more profound sentiments, I happily offer my services. 

Beyond that, there are some pretty apparent advice articles on topics like savings, paying off debt, budgeting, etc. With little else to do as of yet, their Twitter account boosts this content as well. 

The cursory nature of the advice should clue us in to Marcus’s desired audience: the average person who wants access to interest and credit, without reading a ton of small print or having to drive down to the bank. That describes me plenty well, and I had no problem using Marcus. Job well done!

There will probably be more to look at soon, as Marcus staff have promised checking accounts and more are forthcoming. Otherwise, the app is simple and incredibly easy to navigate. You can start accounts and fund them from other bank accounts almost instantly, and it only takes a few hours to close them.

📌 Product Feature Highlights

Savings Accounts

To be sure, the most impressive aspect of Marcus is the easily-accessible savings accounts with competitive interest rates. This isn’t just empty advertising - Marcus’s returns greatly outpace the offerings of every other established bank. They are offering savings accounts with 0.80% annual percentage yield (APY). With an initial deposit of $10,000 into a savings account, and a recurring deposit of $200, you could expect to earn $645 in interest over five years, compared to the national average of $144. With a $20,000 initial deposit and recurring deposits of $500, you are looking at $1,858 in interest, compared to the national average of $332. All of this comes with no monthly or hidden fees.

You can use the high-yield savings calculator here

For a relatively low minimum balance of $500, Marcus also offers high-yield CD accounts. Terms on these range from six months to six years. You can get an APY of 1.00% on a 12-month CD or 1.05% APY on a six-year CD at the time of writing. The nearest competitor to this is Citibank, which offers only a quarter of that rate. 

Marcus presents this deal along with an interesting but mostly nugatory feature: the 10-Day CD Rate Guarantee. It works like this: open a Marcus CD and deposit your minimum $500 within the first ten days and, if the rate for your choice of CD term goes up, you will automatically receive the higher APY rate.

 In theory, this can help you benefit from rising interest rates and avoid arbitrarily getting locked into a lower-rate CD. That said, I’m not sure about the likelihood of interest rates skyrocketing over a ten-day period, in any notable way. Expand that window to something like three months, and then I might start paying attention.

Marcus Loans

If you want to pay off credit cards at a lower interest rate, start a personal project, upgrade your production for your Youtube channel, or consolidate debt, Marcus offers no-fee personal loans in figures up to $40,000. The rates aren’t the worst: APR ranges from 6.99% to 19.99%, and with loan terms ranging from 36 to 72 months. Signing up for auto-pay reduces the APR by 0.25%.

👁️‍🗨️ Final Verdict

Marcus is worth a try! In an industry that often comes down to the question of “who has the most competitive rate?” it seems like an obvious enough choice for a consumer who wants more bang for their buck. Users can also look forward to more features coming soon, as Marcus builds itself out. 

If they don’t walk these rates back any time soon, I would count on Marcus becoming a big success in personal finance and banking. Not many banks in the past have an interest in creating such a low barrier to entry, with no minimum deposit for bank accounts and only a $500 minimum for CDs. With technology at the level it is now, and the population increasingly apathetic about where they bank, Marcus is jumping in at just the right time. 

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