Bank cuts rate for second time in weeks
Savers have been dealt a fresh blow as Marcus is cutting the interest rate on its popular easy access account from 1.2% to 1.05% for new customers.
The rate will also drop for existing customers from 30 May.
It comes just weeks after the online bank reduced its rate from 1.3% to 1.2% at the end of April.
An email to Marcus customers from the bank says "we understand that this won't be news you were hoping to hear, especially during this difficult time".
The deal was once the best on the market in terms of rate, and is now fourth from top.
Saga cuts interest rates
Saga has a 1.2% easy access account that is powered by Marcus, and the rate on this will fall by the same amount and in the same way.
Why are rates falling?
Savings rates are falling as a result of to two consecutive cuts to the base rate made by the Bank of England (BoE) to protect the UK economy from the coronavirus crisis.
Base rate is factored into the interest levels banks pay savers, and cuts to this are almost always passed on in full.
A Marcus email to customers says: "Following the Bank of England's reduction to the base rate, savings rates across the market have continued to fall. We're committed to remaining consistently competitive, but we do need to respond to changes like this."
Where can I find the best easy access savings account?
In a rare occurrence, National Savings & Investments has the best deal in this space - its Income Bonds account which pays 1.16% but requires an initial deposit of £500.
Have a read of your guide on the best savings rates to find out more.
Experts are advising savers to keep a close eye on the market and take advantage of good deals.
Rachel Springall, finance expert at Moneyfacts.co.uk, says: “Clearly speed is crucial to acquire one of the top easy access rates as a domino effect of cuts is taking place in top rate tables.
“Now it seems 1% or more is a good deal when it comes flexible savings accounts, so savers would do well to keep a close eye on the changing market.”
Can I get higher rates for my savings?
Higher rates can be found if you are willing to lock your money away in deals such as fixed rate bonds.
For example, the top one-year fixed rate savings account from Gatehouse Bank pays an 1.5% expected profit rate (EPR).
Although it might be tempting to lock your money away to access higher rates of interest it is important to weigh up whether the extra interest is worth losing flexibility to access your money.
Fixed rate accounts are very restrictive and do not allow you to withdraw money unless circumstances are exceptional.
Shock horror - bank uses loss leading rate to lure in new customers and then changes the terms!