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Major bank rivals challenger’s top-paying savings deal

Written by: Paloma Kubiak
The Royal Bank of Scotland (RBS) has launched a new savings account paying 1.5% interest – matching the offering by US banking giant Goldman Sachs.

The Savings Builder account – offered by both RBS and its sister brand NatWest – encourages customers to save regularly.

It offers 1.5% interest on balances up to £10,000, but in order to achieve this, savers must also top up the account with £50 each month.

But anything above £10,000 will earn just 0.2%.

As an example, someone depositing £10,000 into the account and who pays in £50 a month over the course of the year would earn £151.69 in interest, with the balance standing at £10,751.69.

However, even if you deposit £10,000 into the account but fail to meet the £50 per month regular saving condition, you would earn zero interest:

Important points to note

In order to open the Savings Builder account, you need to hold a NatWest or RBS current account, or open one at the time of application.

You can open and manage the savings account via mobile app, online, in branch or by telephone.

Joint accounts can be held which means couples have the opportunity to earn 1.5% on up to £30,000 of savings.

The interest rate is variable so RBS Group can change the rate.

While savers can withdraw their money at any time, you need to be mindful that you’re always £50 up each month. So if you are going to withdraw funds, the same amount plus £50 will need to go back in to meet the regular saver condition in order to earn the 1.5% interest.

How does it compare to Goldman Sachs’ 1.5% offering?

Just a fortnight ago Goldman Sachs launched its 1.5% easy access account under brand Marcus, sending it straight to the top of the best buy tables.

So far, over 50,000 savers have opened the account, which includes a 12-month bonus rate of 0.15% before it falls to 1.35%. With Marcus, savers can deposit between £1 and £250,000 – a much wider margin than RBS Group’s £10,000 limit. However, savers need to be aware of the £85,000 limit for protection under the Financial Services Compensation Scheme (FSCS).

But the Marcus account can only be opened online whereas savers to the RBS Group proposition have more choice.

Marcus is considered an unfamiliar ‘challenger’ bank despite trading in the US since 2016 and as such, savers may be more inclined to stick to familiarity with the likes of NatWest and RBS.

However, Marcus does allow withdrawals – as many times as you like with no fees or charges, so savers have greater flexibility unlike with the RBS Group offering requiring you to meet the £50 a month deposit criteria.

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