Boost for savers as Marcus raises easy access savings and cash Isa rates

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Popular online bank, Marcus, by Goldman Sachs, is boosting the interest rates on both its easy-access savings deals.

From today, the interest rate on its online savings account and cash Isa will rise from 2.8 per cent to 3 per cent.

However, the rate is still only the 19th best in the market – a far cry from the market-beating rates Marcus offered when it launched back in September 2018.  

Even getting that 3 per cent rate requires savers to opt into a 12-month fixed ‘bonus’ rate of 0.25 per cent, however, or they will only earn 2.75 per cent.

Getting a top-up: Marcus has boosted its savings rates, but these are still some way off the best buys

With the bonus included, it means someone stashing £10,000 into either account could expect to earn £300 in interest over the course of a year.

For those putting down big deposits, cash is protected up to £85,000 per individual by the Financial Services Compensation Scheme and in the case of joint savings accounts that doubles to £170,000.

How does the account work? 

The account can only be opened and managed online and any money paid in or out must be transferred via a linked UK current account.

New customers can open an account with £1 and can deposit up to £250,000.

They can add and withdraw money as and when they want, but there is a withdrawal limit of £20,000 a day online – although there is an option to call in if they need to withdraw more.

It is also worth noting that the account can be opened jointly by two people, but an existing Marcus customer cannot convert their account into a joint one.

How does the bonus work? 

The 3 per cent rate is available to both new and existing customers, with the underlying rate (2.75 per cent) increasing automatically, up from 2.5 per cent for existing customers.

If they have not already done so, existing customers will need to log in to their account to add the extra 0.25 per cent bonus – as will any new customers signing up for the first time.

Existing savers currently have the option to reset their existing 12 month bonus, so that they secure the extra 0.25 per cent for a full year. 

To do this, they must log on to their Marcus dashboard, click ‘view’ on their online savings and then ‘review their savings’ which will show them the option to renew their bonus term and ensure they secure it for the full 12 month period.

How does Marcus compare to other savings deals?

The 3 per cent rate means Marcus sits competitively against the its rivals.

The average easy-access deal pays 1.89 per cent, according to Moneyfacts, while the average easy-access cash Isa pays 2.05 per cent. 

However, shortly after it launched Marcus pledged its savings rates always be competitive and towards the top of the best buy tables – which they currently are not. 

The Goldman Sachs-backed bank’s online savings account currently sits below 18 other easy-access deals.

But a big selling point of the Marcus deal is also its simplicity and lack of restrictions, which cannot be said for all easy access deals.

Best accounts at a glance 

There are none that beat inflation this month, however, make sure you shop around for the best returns possible.

Easy-access: Chip* – 3.4%

One-year fixed-rate: Al Rayan Bank – 4.5%

Two-year fixed-rate: Al Rayan Bank – 4.62% 

Five-year fixed rate: Tandem Bank – 4.6% 

Easy-access cash Isa: Santander – 3.2% 

The top easy access rate is available from savings app Chip, which is paying 3.4 per cent on balances up to £85,000.

All money deposited in Chip’s deal is held by ClearBank, and is eligible for the Financial Services Compensation Scheme up to £85,000 per person. 

– Check out the best easy-access savings rates here.

The best easy-access cash Isas are currently offered by Santander and Cynergy Bank.

Santander’s new issue — number 18 — of its online-only e-Isa pays a top variable rate of 3.2 per cent.

But beware, the rate only lasts for a year after which your money is transferred into the bank’s Isa Saver which pays just 0.6 per cent.

If a customer’s savings are in its current Isa Saver or older issues of e-Isa, which all pay lower rates, they can ask Santander to transfer it into the new one for a better rate.

Cynergy Bank is also paying 3.2 per cent  for full easy-access. It can be opened with just £1.

Those who wish to make an Isa transfer to Cynergy must do at the point of application. They cannot transfer any Isa’s to the this deal once it has opened.

– Check out the best cash Isa rates here.