Managing Director at Marcus by Goldman Sachs Sonali Divilek joins Yahoo Finance’s Zack Guzman to discuss options for consumers to manage their money amid the coronavirus.
ZACK GUZMAN: Right now, we're digging into the way that Americans are choosing to save-- trying to save, and again, a return to a low interest rate environment as the Fed has made their moves. But despite that fact that we are back at low interest rates, we are still seeing Americans put their money in savings accounts. For more on that, I want to turn to Sonali Divilek. She's managing director at Marcus by Goldman Sachs.
And Sonali, when we look at it, you might not think that Americans would want to put their money into these accounts. But I guess, you know, volatility is hitting the stock market. There are only so many options out there for people looking to save, so what have you seen in the way that that's changed in this new environment?
SONALI DIVILEK: Yeah, absolutely. No, I think you're spot on. I think the volatility has made people nervous, and people want to put their money in something they believe is stable, a place that's still offering value. And high yield savings accounts are certainly a place that offer that in this environment.
At Marcus, we have had an absolute record quarter. Our inflows are 40% up since the end of last year, and week over week, we're seeing record highs of new customers coming through. We just increased our deposits by $12 billion off a base of $60 billion just in Q1.
ZACK GUZMAN: Yeah, and right now, I mean, I'm just looking at Marcus right now at 1.55% APY on these. The national average, 0.36% right now. We've seen all the rates across the board come down as the Fed has adjusted their overall interest rates here.
On that front, I know that you guys have tried to attract a lot of consumers, perhaps younger Americans as well here, trying to attract people with higher than average interest rates. How do you kind of adjust your strategy as we do kind of see rates come down across the board to maybe bring on new customers? Are you guys at the point now, though, where maybe that's not as important as maybe building some other kind of options for them, if they are looking to save in different ways? I mean, where does Marcus kind of go from here?
SONALI DIVILEK: Yeah, no, you know, our goal is absolutely to continue to add value. You won't necessarily see us have the highest rate that's out there, but we focus on our customer experience, kind of the expertise we have at Goldman Sachs. We have some interesting products, like no penalty CDs, where you can put the money in. But you can pull the money out, if needed, and you won't be hit with any withdrawal fees. And we're finding that really attractive to our customers.
We've also built some pretty compelling digital experiences, which we're seeing customers more and more interact with. And I think they like the idea that they can continue to check on their money, continue to see snapshots of their overall income, and that's keeping customers with us. They're coming in, and they're staying.
BRIAN CHEUNG: Hi, Brian Cheung here. So what are the pain points that you're hearing about from customers? I've heard of overdraft being one example, right? Them trying to draw out, but they end up getting hit with these fees. Also, just generally high APRs on their credit cards. I mean, are you getting a lot of calls from customers to say, hey, how can I get some help on these things? And there any kind of regulatory changes from the Federal Reserve or from other banking regulators that have maybe used it on the lenders and the depositors to kind of pass on help to consumers?
SONALI DIVILEK: Yeah, absolutely. You know, I think and I would encourage all folks to really look at their own banks. I think a lot of banks are going out there, particularly at this kind of unprecedented time to see what they can do. We have absolutely been really proactive given this crisis.
On the Apple card side, we are allowing customers to digitally enroll and actually defer their payment another month. You don't even have to call and explain your situation. We're making sure you're able to do that. We're allowing our loans customers to defer their payments an extra month. And if you do have a high yield CD, because this is a time where you might have need access to those emergency funds, we're actually waiving those penalties for withdrawing money out of CDs.
And I think we're certainly not the only one, but there's a lot of the financial services industry that is really making strides to try to make that happen. Additionally, the Fed just announced that people can actually start withdrawing from savings accounts more than six times within a month, which has always been a little bit of a crunch for consumers in terms of how much money to put in those savings account. So I think the financial services industry and the federal government are really trying to figure out ways to ease that burden for consumers.
ZACK GUZMAN: And Sonali, before we let you go, I know you mentioned that it was a record quarter for you guys at Marcus. We've been focusing in on kind of now since we've kind of hit that market bottom here and states start to reopen, whether or not things are starting to change when you look week over week. Are you looking into any of that data, and does it show you anything about maybe an inflection point that you've kind of reached there as we kind of move out, optimistically and hopefully, the worst of this crisis?
SONALI DIVILEK: You know what we're hearing? We actually conducted our first consumer sentiment survey amidst sort of this crisis. We are seeing about 40% of people think they're going to invest less. And there's actually a focus on prudence and saying, how am I going to be more responsible with my money to come? Which I think is always a positive sign.
They think it might be because the stock market is going down. But they also think, hey, my paycheck may not be what it once was, so I'm going to actually be a little bit more prudent about how I'm spending my money. So I think those behaviors in the long run and when we do come back into a stronger market, those kind of ideas will last.
ZACK GUZMAN: All right, there you go, the latest on the consumer banking from Sonali Divilek, a Managing Director at Marcus by Goldman Sachs. Thank you so much for joining us to share that.
SONALI DIVILEK: Thank you so much.