Marcus, the online savings arm of Goldman Sachs, has confirmed it will cut the rate on its Online Savings Account from 0.7% to 0.5% AER (variable).

For existing customers, the rate cut takes effect on Friday 11 December and represents another blow to savers after it slashed the rate from 1.05% to 0.7% in October.

Marcus said it is currently writing to existing customers to give them at least 14 days’ notice of the rate change, effective from 11 December.

The lower rate applies to new accounts from today. However, Marcus closed the account to new applicants in June this year in a bid to keep within a regulatory limit and to manage how quickly it grows, after being flooded with deposits.

It is still currently closed to new applicants so the rate cut only really applies to existing customers.

Following the reduction, it means Marcus is offering the same rate on its easy access account as for it’s 1 Year Fixed Rate Saver.

Overall, the subsequent rate is a long way off from its market-leading offering of 1.5% at launch in September 2018.

A Marcus spokesperson, said: “We have made the difficult decision to adjust the interest rate on our Online Savings Account in response to further movement we have seen across the savings market recently.

“Since the Bank of England’s base rate was reduced to its lowest level on record earlier this year, interest rates across the savings market have continued to fall. We have to keep these market conditions in mind and adjust our interest rates in response to ensure we remain a sustainable savings business for the long-term.”

‘Race to the bottom of the charts’

Saga, which partners with Marcus to offer savings products, has also cut the rate on its easy access savings account to 0.50% AER (variable) including a bonus rate of 0.10% gross (fixed) for the first 12 months.

The minimum balance is £1. Based on a £1,000 deposit over 12-months, savers would earn £5 in interest.

The move comes just a day after HSBC and First Direct slashed the interest rate on its Regular Saver account from 2.75% to 1% while NS&I’s brutal cuts across the board took effect yesterday.

Anna Bowes, co-founder of website Savings Champion, said: “Unfortunately, since the NS&I cuts were announced, the rates on offer have been on a downward spiral and this is the latest in a long line of providers seemingly racing to the bottom of the charts. While in no way unexpected, this change comes from a provider that previously had sparked competition in the easy access market and it is symptomatic of the market at the moment.

“That said, the rate is still significantly better than what is available from NS&I and the big high street banks and the best advice, as always, is to look at the very best rates on the market and move your money to get as much interest as possible out of your savings.”