Marcus by Goldman Sachs, the UK savings provider, has cut the bonus rate paid on its market leading easy access savings account, losing its place at the top of our best buy tables.
Their Online Savings Account has paid 1.50% AER, comprising an underlying rate of 1.35% with a bonus of 0.15% for one year, until 3rd September. While the underlying rate remains the same, the bonus rate has been cut to 0.15% giving an overall rate of 1.45%, which drops it behind our new market leader, Shawbrook, paying 1.48%.
On 27th September 2018, Marcus launched in to the UK market with some style. At the time, Kent Reliance topped the easy access tables with a rate of 1.37%. Nottingham Building Society briefly knocked Marcus off top spot with their 1.55% eSaver account which launched on 30th October, this lasted all of 48 hours before it was withdrawn at the start of November. Since then, while providers have closed the gap behind them and, in the case of Virgin Money, sat alongside them, nobody has toppled them.
In May 2019, Marcus announced that over 250,000 customers had signed up and that balances were over £8bn. I'd estimate that figure is now north of £10bn. To put that in context, Aldermore, the oldest of the wave of new entrant banks that have entered the market in the past decade, hit £8bn of balances at the end of 2018.
In my September column (https://www.thesavings.guru/blog/153-september-savings-round-up), I hinted that Virgin Money's price cut might see Shawbrook drop back however I expected that Marcus would hold firm. I did suggest that Marcus savers should consider renewing their 12 month bonus with Marcus and highlighted how this could be done. My inbox this morning has some grateful savers who took that advice just in time!
The obvious question is whether Shawbrook will now follow Virgin Money and Marcus by cutting its rate. I expected a change before the Marcus cut, now I'd be amazed if they were still paying 1.48% and leading the tables at the end of the month. Unless a new competitor joins the market with a higher rate, expect a Shawbrook rate cut sooner than later. Shawbrook have consistently been in our best buy tables since they launched their easy access account in August 2017. While, I don't expect that to change, a cut of between 0.05% - 0.10% to fall back in alongside the pack seems inevitable. Savers keen on what is an excellent no strings account should move quickly to secure the 1.48% rate.
While I don't predict the kind of falls in easy access rates that the market has seen in long term fixed rate bonds in recent months, we are in a very fast moving market and savers should certainly move quickly if they see an attractive rate.