Marcus Bank finally launches another savings account after 18 months… but the new one-year fixed-rate pays less than its original easy-access
- Marcus launched a 1.5% easy-access account in September 2018
- Today it added to that with a new 1.45% short-term fix
- While the rate is not a best buy, it is a competitive rate and could help cushion further falls as most top deals are currently offered by smaller banks
Goldman Sachs-backed Marcus Bank has finally expanded its offering beyond a sole easy-access account in Britain after 18 months, but savers hoping for a new top rate deal will be disappointed.
Instead the UK retail arm of the Wall Street titan has launched a one-year fixed-rate deal paying 1.45 per cent, a competitive rate but only enough for tenth place in the independent This is Money’s best buy tables.
Marcus’ easy-access deal paid 0.05 percentage points more than this when it launched in September 2018, in a sign of how far savings rates have fallen since.
Goldman Sachs-backed Marcus Bank arrived in the UK in September 2018 with a best buy easy-access deal. But today’s launch is its first new account since then
But while savers may be saddened by the fact the rate is not a new best buy, it is still competitive in the current climate, and may provide a cushion if short-term fixed-rate deals fall further.
While the market has held up relatively well since back-to-back Bank of England base rate cuts over the last fortnight, with some providers even launching new top deals, the majority of the banks at the top of our best buy tables are smaller banks unlikely to be able to cope with a surge in demand.
This is true at the best of times and is doubly the case at a time when savers are likely to be squirrelling their cash away and even cashing out other assets in the hunt for a safe port.
While the average one-year fixed-rate fell just 0.06 per cent between 1 March and 23 March, according to Moneyfacts, best buy rates are beginning to buckle.
SmartSave withdrew its one-year fixed-rate of 1.56 per cent, at one point a best buy, last Friday.
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Meanwhile OakNorth slashed its 1.57 per cent paying one-year fixed-rate, also a best buy, on Wednesday, leaving Hampshire Trust Bank, Investec and United Trust Bank as the best rates around paying 1.55 per cent.
While Marcus’ arrival a year and a half ago helped push rates up, on this occasion it may end up playing a more defensive role, helping to cushion falls because of its size.
It took in a whopping £8billion in deposits from rate-starved savers in its first seven months with its easy-access deal.
This is Money has previously suggested a possible ‘Marcus effect’ in the easy-access market, with rate cuts from the bank reflected in a reduction in rates across the board.
Before it cut its rate from 1.5 per cent to 1.45 per cent, easy-access rates stood at an average of 1.46 per cent.
Three weeks after its second cut in December from 1.45 per cent to 1.35 per cent, they had fallen to 1.34 per cent.
Its easy-access deal now pays 1.3 per cent, just 0.01 percentage point lower than the highest-paying bank Virgin Money.
Industry expert James Blower said: ‘This makes perfect sense for Marcus.
‘There is only a 0.25 per cent gap between the best easy-access and the best one-year rates and it’s logical to convert some of their existing savings deposits to one-year, to encourage existing customers to bring new money to Marcus and to have another product for attracting new customers.
‘One-year fixed-rates are the most popular product on our site at the moment and I’m sure it is no coincidence that Marcus have moved into this category first.’
THIS IS MONEY’S FIVE OF THE BEST SAVINGS DEALS