The launch of the new Marcus by Goldman Sachs Online Savings Account, has got to be one of the worst kept secrets of late.
However, now that it has officially launched with an easy access account paying a market leading 1.50% AER on balances of up to £250,000, we expect huge interest as it’s offering such a competitive rate – it is the highest easy access rate seen since March 2016.
And with over 80% of the UK savings market sitting in easy access accounts, there is £731bn that could be earning more.
Unfortunately, much of this easy access cash will be languishing in poor-paying high street bank savings accounts, earning as little as 0.15%.
On a balance of £85,000, savers who have funds in these high street accounts could earn more than £1,000 in additional interest by switching – and still keep all their funds secure.
Savers who fail to move their money from the shockingly low-paying easy access accounts on the high street are allowing themselves to be robbed, as they are missing out on additional interest compared to the top-paying accounts.
A general malaise has spread across the savings market because of the continually low rates of interest available. But savers need to realise that the high street banks are using this to offer them much lower rates than they can get elsewhere because of the feeling that ‘there is not much to be gained by switching’.
But that is most definitely not the case. By moving from some of the lowest-paying accounts with the likes of HSBC, to a top-paying account such as the new account from Marcus, you can get up to 10 times more interest in a year. On a deposit of £85,000, that is the difference between earning either £127.50 a year or £1,275 a year.
By completing an application, which might take you half an hour, you can get an additional £1,147.50 a year. If you were to base this figure on an hourly rate for the time it took you to make the switch, you would be hitting £2,295 an hour. Now, if someone offered me that kind of wage, I would snap it up, so there is a very good reason to switch to a better account.
Over the last few years, active savers have become more used to unfamiliar names entering the UK savings market and as a whole they have been fully embraced because as long as the funds are protected by the Financial Services Compensation Scheme, there is no reason not to take a leap of faith.
And the fact that Marcus is incorporating the Goldman Sachs name into its brand, will add an element of familiarity.
Hopefully this will be the start of a new boost to competition among best buy accounts – which is great news for savers.
|Table showing how much more interest savers can earn if they switch from a high street bank|
|Current Rate||Interest earned based on amount deposited||How much more interest earned on best easy access rate (1.50%)|
|Provider/Account Name||AER %||£50,000||£85,000||£50,000||£85,000|
|Lloyds – Easy Saver||0.20%||£100.00||£170.00||£650.00||£1,105.00|
|HSBC – Flexible Saver||0.15%||£75.00||£127.50||£675.00||£1,147.50|
|NatWest – Instant Saver *||0.30%||£150.00||£255.00||£600.00||£1,020.00|
|Barclays – Everyday Saver *||0.30%||£150.00||£255.00||£600.00||£1,020.00|
|Santander – Everyday Saver||0.35%||£175.00||£297.50||£575.00||£977.50|
|Best Easy Access Account - Marcus by Goldman Sachs (1.50%)||1.50%||£750.00||£1,275.00|
|Rates based on £50,000 and £85,000 deposited|
|* This is a tiered account. Rate shown based on balance of £50k and £85k.|
|Source: Savings Champion|
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