personal finance

Marcus cuts rate on instant access savings account 


Goldman Sachs has dropped the interest rate on its Marcus instant access savings account to 1.35 per cent, knocking it off the top of the best-buy tables as overall savings rates continue to slide. 

The reduced rate will apply to new customers, although existing Marcus savers will still receive 1.45 per cent until their 12-month “bonus rate” expires. 

This is the second time the retail arm of the Wall Street investment bank has reduced interest paid to savers after it launched with a table-topping rate of 1.5 per cent last September. 

“In recent months, there has been a general lowering of interest rates in the savings market,” said Goldman Sachs.

“As part of this shift, we need to adjust our rate . . . to allow us to remain competitive and continue to offer savers an attractive, flexible savings option.”

According to Money Saving Expert, the best easy access account is now Shawbrook Bank which offers 1.41 per cent on a minimum deposit of £1,000, with a minimum withdrawal rate of £500. Next best is the Post Office, paying 1.38 per cent including an 0.88 per cent bonus for 12 months.

Analysts said the rate cut on the Marcus account signalled that Goldman had less desire to attract deposits as it approached the £25bn ceiling that would compel the bank to comply with the UK’s “ringfencing” legislation.

British banks that hold more than £25bn — about $31bn — in customer deposits for a sustained period must legally “ringfence” or separate their retail and investment banking operations.

Goldman recently announced plans to enter the stocks and shares Isa market in partnership with Nutmeg next year, but these funds would not count towards the £25bn cap. 

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said while the arrival of the account had shaken up the easy access savings market, “this golden period was always going to pass once Marcus raised the funds it wanted, and we seem to have come to that point now”.

According to data from Moneyfacts, the number of UK savings accounts that match or beat consumer price inflation fell again in November. 

“There is still not one easy access account on the market that beats the 1.5 per cent inflation rate,” said Rachel Springall, finance expert at Moneyfacts.

According to its research, there are now 171 fixed rate bonds, 41 fixed rate Isas and nine notice accounts (based on a £10,000 deposit) that can match or beat inflation. Within that, 145 fixed bonds, 30 fixed Isas and six notice accounts pay more than 1.5 per cent.

“The savings landscape has been rife with cuts this year, so consumers will need to take time out to compare deals to ensure they are getting the best possible return for their hard-earned cash,” she said.

According to Ms Springall, the Marcus cut could encourage other providers to follow suit, which would deal another blow to savers.

“It’s really important that consumers compare rates regularly, especially if their cash is with a big high street bank. As an example, HSBC pays just 0.10 per cent on its Flexible Saver.”

She added that the savings outlook could get even tougher in 2020 if the Bank of England decided to cut interest rates further.



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