The Goldman Sachs technology M&A team, led by Sam Britton, has cashed in on its software focus and decades of experience to dominate 2019's biggest deals.Technologyread more
American small and medium-size companies that rely on China are scrambling to adjust their business plans in response to the escalating trade war.Traderead more
Here are the products that stand to be the most affected by China's new tariffs on $75 billion worth of U.S. goods.Marketsread more
The summit comes amid fears over a global economic slowdown, and U.S. tensions over trade allies, Iran and Russia.Politicsread more
The world's second biggest economy is past a point where it cannot ignore its enormous debt anymore, according to an analyst.China Economyread more
Carl Medlock used to work at Tesla. Now he's one of the few people in the U.S. that can fix the company's original Roadster electric vehicles.Technologyread more
Trump does have some powerful tools that would not require approval from U.S. Congress.Politicsread more
Stocks dropped after Donald Trump ordered that U.S. manufacturers find alternatives to their operations in China.US Marketsread more
As demand for lab monkeys continues to rise, U.S. scientists are reporting delays in research projects because they can't obtain enough animals, according to the National...Politicsread more
The European Union will respond in kind if the U.S. imposes tariffs on France over digital tax plan, EU chief Donald Tusk told G-7.Technologyread more
Trump said he will raise tariffs on $250 billion in Chinese goods to 30% and hike duties on another $300 billion in products to 15%.Politicsread more
Branchless bank Green Dot is launching the highest yielding bank account in the industry.
The Pasadena, California-based bank, which gained traction with prepaid cards in the dot-com era, launched a new bank account Tuesday with 3% annual interest on savings, and 3% cash back on all online debit card purchases. The average rate for savings accounts, according to Bankrate.com, is 0.1%.
The 3% rate on a savings account is the highest for any bank in the country, according to Bankrate.
Green Dot founder and CEO Steve Streit said despite being 30 times the national average and above the current Fed Funds rate, the 3% APY is sustainable and meant to be permanent.
Green Dot is hardly the only one luring in customers with high-yield, low-fee options. But many of them have come from non-bank, fintech start-ups or challenger banks, which instead partner with FDIC-insured banks. Betterment launched a checking and savings product last week with a 2.69% APY following Wealthfront, which offers 2.57%. SoFi offers 2.25%. Chime, which has a .01% annual yield, meanwhile has ushered in 4 million customers by offering advances on paychecks, which Green Dot also plans to offer with its new account.
"The start-up banks out there are effectively marketing companies that use other people's assets to create a bank product," Streit said. "There's nothing illegal about it. But it does mean that you're paying a lot — and to have a banking product they need to do that."
Green Dot's offer is also above the Fed Funds rate, or the rate at which banks lend money to each other. That is likely to drop this week after a widely expected rate cut by the Federal Reserve. In June, Goldman Sachs' consumer arm Marcus cut interest rates on its high-yield accounts from 2.25% to 2.15% ahead of the central bank's move. Ally Bank also lowered rates to 2.1% from 2.2% ahead of the Fed decision. Still, Streit said a single 25 basis point drop after this week's FOMC meeting wouldn't change Green Dot's ability to profit off of the savings product.
"If rates were lowered precipitously quarter after quarter we may have to look at it," Streit told CNBC in a phone interview. "But there's certainly nothing in the near term that we're worried about."
Streit started Green Dot in 1999 with prepaid debit cards geared towards internet users who wanted to shop online. The company went public on the New York Stock Exchange in 2010 and a year later, got into the banking business by acquiring Utah-based Bonneville Bank for $15.7 million. In the years since, it has partnered with Uber, which uses Green Dot checking accounts for its drivers, and powers Apple's Pay and Intuit's TurboTax. It also has an agreement with Walmart to issue the retailer's prepaid debit card.
The stock has had a tough 2019 though with shares of Green Dot down more than 37% year to date while the broader market rallied. Streit said this announcement is part of his promise of a turnaround to shareholders.
"We promised investors that our new products were going to not only embrace our legacy customers, but that they were going to open themselves up to a broader collection of customers to expand our total addressable market," he said. "We've done that here."
Because the bank has a relatively low cost infrastructure and no branches, Streit said they can afford to pay customers a higher rate without losing money. It plans to profit off of interchange fee charged when someone swipes a debit card and the fee charged if the cardholder does not spend at least $1,000 per month with the debit card. The hope is that the savings rate, which is only available up to $10,000, ushers in more customers and that existing ones make this their primary bank account, Streit said.