Marcus raises easy access savings and cash Isa rates to 2.8%

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 2.5 per cent to 2.8 per cent.

Savers will need to opt into a 12-month fixed ‘bonus’ rate of 0.25 per cent, however, or they will only earn 2.55 per cent.

>> See the best easy-access savings rates using our independent best-buy table

The Goldman Sachs backed bank has increased both its easy-access account and cash Isa

With the bonus included, it means someone stashing £10,000 into either account could expect to earn £250 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’s also worth noting that the account can be opened jointly by two people, but an existing Marcus customer can’t convert their account into a joint one.

How does the bonus work? 

The 2.8 per cent rate is available to both new and existing customers, with the underlying rate (2.55 per cent) increasing automatically from 2.25 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 2.8 per cent rate means Marcus sits competitively against the typical savings rate.

The average easy-access deal pays 1.8 per cent, according to Moneyfacts, while the average easy-access cash Isa pays 1.93 per cent. 

>> Check out the best easy-access rates and best cash Isa rates.

However, the Goldman Sachs-backed bank’s online savings account currently sits below more than 20 other easy-access deals. 

Yorkshire Building Society is the best buy paying 3.35 per cent, albeit only on balances up to £5,000.

Any cash held above £5,000 will earn a rate of 2.85 per cent – rising from 2.5 per cent previously. 

A balance of £10,000 will earn interest across two tiers; the first £5,000 earns 3.35 per cent and the additional £5,000 earns 2.85 per cent. 

However, Yorkshire BS only allows two withdrawals per year from the account without loss of any interest, with the year mark set on the anniversary of the account opening. 

Anyone who wants a savings account they can dip in and out of more often, might instead consider Newbury Building Society’s paying 3.15 per cent.

Its Welcome to Newbury account is available to all new members and can be opened in person in our branches, online or by post. 

Shawbrook’s Online Easy Access account pays 3.01 per cent, while Tandem pays 3.05 per cent on its app account, including a 0.2 percentage point bonus for a year.

You can also earn 3.1 per cent with Paragon Bank online, but you can only make three withdrawals a year. 

Others pushing the 3 per cent mark include Atom, along with Saffron BS and Secure Trust online — all offering 2.95 per cent.

Should you sign up to Marcus?

There are plenty of deals paying 3 per cent or more at the moment, so savers could get more interest elsewhere. 

However, one reason people might consider the Marcus account is that, unlike a number of the top paying ‘easy-access’ deals, Marcus comes with no strings attached – other than the £20,000 online withdrawal limit.

For example, a number of other easy-access providers, which are currently at the top of our best buy easy-access tables limit savers to a certain number of withdrawals each year or a maximum balance.

Furthermore, with some savers wary of moving their money to smaller lesser known providers, the fact that Marcus is a banking service offered by Goldman Sachs may give them some peace of mind.

Many other big banks continue to pay rock-bottom rates on easy-access accounts.