The rate on the formerly market-leading easy-access savings account has been cut to 1.35%
Goldman Sachs is cutting the interest rate on its Marcus account from 1.45% to 1.35% for new savers.
This is the second cut in the space of three months and leaves the former market-leading account well down the best buy table.
Marcus was launched to much fanfare in September 2018 at a rate of 1.50%, making it the top-rated account. This included a bonus of 0.15% which was payable after the first year.
A year later, the headline rate was reduced to 1.45% with a bonus of 0.10% after the first year. The new rate does not include a bonus.
The news comes after a report in The Telegraph that Goldman Sachs is looking to slow the growth of its Marcus brand in the UK to avoid stricter regulations.
The paper says this is to stop the volume of deposits exceeding £25 billion, the point at which banks have to separate their retail operations from their investment banking arms.
Goldman Sachs has also cut the rate on its Saga easy-access savings account from 1.40% to 1.35%. This includes a 0.20% bonus for the first 12 months.
A spokesperson from Goldman Sachs says: “In recent months, there has been a general lowering of interest rates in the savings market. As part of this shift, we need to adjust our rate with the market to allow us to remain competitive and continue to offer savers an attractive, flexible savings option.
“We’re mindful of ring-fencing but it only becomes an issue with £25 billion of deposits and we’re currently at £12 billion – so we are a way from reaching that threshold.”
Anna Bowes, co-founder of Savings Champion, says: “This is disappointing, although not wholly expected.
“The worry is that other providers will follow suit and easy access best buy rates will start to fall again. The ‘Marcus effect’ has helped to keep the best easy access accounts rates at a steady level for some time, amid falling fixed term bond rates.”
This year has been a tough one for savers, with lenders slashing rates across the board.
For existing savers the rate will remain the same at 1.45% for 12 months from when they opened their account. So if you have already got an account you may want to hang on to it.
If you are a new saver there are higher paying interest rates available.
The new market-leading account is from Shawbrook Bank with its Easy Access – Issue 17 which pays 1.41%. Further additions and withdrawals are allowed.
You can open the account online with a minimum of £1,000. It can also be managed online or by phone.
Its nearest rival is Chelsea Building Society’s One Year Limited Access Saver at 1.40% which can be opened online with £100. However, you are only allowed one withdrawal a year.
Post Office Money has an account at 1.38% which can be opened with a £1 deposit online. It comes with a bonus of 0.88% for 12 months.
If you are looking for a higher paying account and don’t mind locking your money away, you can always try a fixed deal.
The current highest paying one-year fixed deal is from Gatehouse Bank at 1.70%. Note, this account's rate is an expected profit rate (EPR).
If you don’t mind tying your money up for longer, Gatehouse Bank also has a two-year fixed deal at 1.90% and a three-year bond at 2%.
Andrew Hagger, personal finance expert at of Moneycomms, says it is "another blow for UK savers".
He says: "When a market leader cuts rates it leads to a ripple effect which allows other providers to trim rates and still feature in the best buys.
“It’s a grim situation for savers but with some accounts paying less than 0.2%, make sure your money isn’t stagnating in one if these below par accounts.”