App-based bank Marcus ups savings interest rate for fifth time this year: We read the small print and how it compares to rivals
- The rate on its online savings account and cash Isa rose from 3.3% to 3.5%
- The headline rate includes a 12-month fixed-rate bonus of 0.34%
- It marks the fifth time this year that Marcus has hiked rates
Marcus, the app-based bank run by Goldman Sachs, is once again boosting the interest rates on its popular easy-access savings deals.
From today, the rate on its online savings account and cash Isa will rise from 3.3 per cent to 3.5 per cent. This rate includes a 12-month fixed bonus of 0.34 per cent – which we explain in more detail below.
It marks the fifth time this year that Marcus has increased the rate, which has now risen by a full percentage point from 2.5 per cent in February.
Rate boost: Marcus, which is backed by Goldman Sachs, now pays 3.5% on its Online Savings Account and cash Isa accounts
The new rate on both accounts is available to all new and existing customers, with the underlying rate rising automatically for existing customers.
Marcus’s easy-access deal is well ahead of the average easy-access rate of 2.1 per cent, based on Moneyfacts data.
However, it remains shy of the best buy deals. This is Money’s best-buy savings interest rate table is currently topped by rival app-based bank Chip, which pays 3.71 per cent.
Marcus’ easy-access cash Isa rate is also well ahead of the average rate of 2.29 per cent.
It falls only 0.01 percentage points shy of the market-leading deal which pays 3.51 per cent, courtesy of Paragon Bank.
> Check out the best cash Isa rates here
The one downside is that Marcus doesn’t accept cash Isa transfers in – so it won’t be possible for those with cash Isas held elsewhere to move them across.
Someone depositing £20,000 in either the easy-access savings account or cash Isa could expect to earn £700 in interest over the course of a year, if the rate remains the same.
What is in the Marcus small print?
Both accounts can only be opened and managed online, and any money paid in or out must be transferred via a linked UK current account.
In terms of the online savings account, new customers can open it with just £1 and can deposit up to £250,000.
Just remember that the FSCS only protects deposits up to £85,000 per person, or £170,000 in the case of joint accounts.
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 you 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.
Those opting for the cash Isa deal can deposit up to £20,000 this tax year as per the maximum Isa allowance.
How does the bonus work?
The new 3.5 per cent rate is available to both new and existing customers, with the bonus automatically added for new customers.
If they have not already done so previously, existing customers will need to log in to their account to add the extra 0.34 per cent bonus.
Existing savers also currently have the option to reset their existing 12 month bonus, so that they secure the extra 0.34 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.
