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Goldman Sachs has reopened its Marcus-branded online savings accounts to UK customers, nearly eight months after an increase in demand forced it to temporarily pull applications.
The Wall Street bank said it was reopening its doors, given that “conditions in the savings market have changed” since last summer.
Cash-rich households, who were lucky enough to keep their jobs and cut costs during Covid lockdowns, collectively poured billions of pounds into savings accounts last year.
But as big institutions cut interest rates, savers turned to banks such as Marcus for higher-than-average returns.
Marcus, which was offering table-topping interest rates of 1.05% last summer, has dramatically reduced its interest rates to only 0.5%.
That is still much higher than the average 0.17% offered on easy access accounts and is just shy of the table-topping 0.6% offered by ICICI bank, which will drop to 0.5% in March.
Rachel Springall, a finance expert at Moneyfacts, said: “It is hard to tell whether this re-entry from Marcus will stir up competition at a time where interest rates are at historic lows but, as with any attractive rate, savers would be wise not to hang around to wait and see as a good deal doesn’t tend to have a very long shelf life.”
The bank closed its doors after deposits edged above £21bn – approaching the £25bn mark that requires banks to protect consumer cash by holding it in a different financial entity.
Under the Bank of England’s ringfencing rules, that entity would have to hire a separate board of directors and keep consumer savings separate from Goldman’s investment banking operations. The extra costs would make it harder to offer savers attractive rates.
More than 500,000 people have opened savings accounts with Marcus since its UK launch in 2018. Its US rival JP Morgan is now throwing its hat into the ring, having confirmed plans to launch its Chase consumer bank in Britain later this year.