Challenger bank Marcus ups savings rates: How good are they?
Marcus by Goldman Sachs has increased the savings rates on its trio of products: Online Savings Account, Cash ISA, and 1 Year Fixed Rate Saver.
The increases are as follows:
- Online Savings Accounts: Rise from 1.8% AER/1.79% gross to 2% AER/1.99% gross (variable), including a 12-month fixed-rate bonus of 0.25% gross.
- Cash ISA: Rise from 1.8% AER/1.79% gross to 2% AER/1.99% gross (variable), including a 12-month fixed-rate bonus of 0.25% gross. It doesn’t allow existing ISA transfers and it isn’t a flexible ISA so whatever you take out can’t be replaced within your tax-free allowance. The maximum annual ISA allowance is £20,000 for the 2022/23 tax year.
These will be automatically applied to existing customers from today “as this is a change to the underlying variable rate”, Marcus said.
- 1 Year Fixed Rate Saver: Rise from 2.5% AER/gross (fixed) to 2.7% AER/gross (fixed) for new customers who open an account on or after 18 October 2022.
All three products have a minimum deposit requirement of £1 and the maximum that can be saved is £250,000, though savers should be mindful of the £85,000 Financial Services Compensation Scheme which protects the first £85,000 of the total balance held, and the ISA allowance of £20,000.
A Marcus spokesperson, said: “We’re pleased to have increased our interest rates following recent movements in the wider savings market and to reflect ongoing increases to the Bank of England Base Rate. We are committed to offering competitive interest rates to our customers.”
How good are these rate rises?
Currently, the top paying easy access rate is offered from Yorkshire Building Society paying 2.5% AER/gross (minimum £1), according to Savings Champion data.
Coventry Building Society offers 2.25% AER/gross on its cash ISA while the top paying one-year fixed rate bond pays 4.75% (JN Bank).
At launch in September 2018, Marcus offered a market-leading rate of 1.5% on its easy access account and it was consistently in the top tables, attracting hundreds of thousands of rate-starved savers.
However, since then, new challengers and competitors have pipped it to the top spot and as such, these product rate rises fail to make it into the top five brands named in the best buy tables.