Goldman Sachs’ Marcus bank is looking for an Isa boss as it confirms that tax-free savings accounts will be launched soon … but only for existing savers
- Marcus launched a one-year interest-rate account at the end of March
- It has previously said that it is likely to launch new savings accounts
- It posted a vacancy on LinkedIn for a Isa Operations team leader and told This is Money that it planned to launch a cash Isa in the near future
Goldman Sachs’ Marcus will soon launch a cash Isa, This is Money has learned, but in one fell swoop for those hoping it will raise duty-free rates, it plans to make it available only to existing customers.
The Wall Street bank’s UK savings department posted a vacancy for an Isa operations team leader on LinkedIn on Thursday, calling for a ‘savings specialist with experience working with Isas’.
Responsibilities include ‘managing incoming Isa questions and supporting an Isa transfer service’.
The bank posted a vacancy on LinkedIn on Thursday calling for a ‘savings specialist with experience in working with Isas’
In contact with This is Money, Marcus said that it planned to introduce a tax-free cash savings account in the near future, but is currently planning to offer it only to existing customers. It gave no further details.
The news that it may only be open to existing Marcus savers is a setback for those hoping that the bank’s intervention could boost competition in the Isa market, where best buy rates have often lagged regular, easily accessible in recent years bills.
Marcus is also just under £ 4 billion under a ceiling, forcing him to shield his UK operations from the rest of Goldman Sachs. This means that it is unlikely to launch a best buy price and hoard billions of pounds of Isa cash.
However, a savings expert told us that there may still be a way for newcomers to access the account.
If Marcus’ new tax-free savings account is launched with a lucrative offering, the still-available fixed one-year interest rate could still be a solution despite its own low rate.
Savers could potentially open the fixed rate bond, the only one open to new applicants, deposit £ 1 and therefore be considered an existing customer for the purpose of opening his new cash Isa, said James Blower, founder of The Savings Guru.
Recent taxpayer figures found that the money was deposited into nearly 8.5 million cash in Isas in 2018-19, up 1.4 million from a year earlier, down five years in Isa subscriptions helped turn around.
There was an increase of £ 7.3 billion in the amount of money kept in cash, Isas, meaning 65 percent of UK savings of £ 67.5 billion in cash was held in cash last year as savers took money from risky investments.
But the corona virus hit hard the tax-free savings rate, with an average Isa rate dropping from 0.85 percent in January to 0.37 percent in late June, according to Moneyfacts.
Currently, no Isa pays 1 percent compared to two easily accessible accounts, and the best rate without any catch is just 0.65 percent.
Marcus shook up the savings market when he launched his easily accessible account in September 2018, with a best buy rate of 1.5 percent. It has almost always surpassed our best buying tables since then, but it closed the account for newcomers early last month.
It still pays 1.05 percent to those who already have an account.
After a five-year decline, Isa subscriptions came back in 2018-19, thanks in large part to a resurgence of those saving money in cash
65% of Britain’s £ 67.5 billion Isa savings were held in cash last year, the largest amount since 2016, as investors emerged from riskier alternatives
It closed after a £ 4 billion influx of savers in March, April and May, raising deposit levels to £ 21 billion, just below the £ 25 billion cap it requires to foreclose its UK operations.
It said at the time that the decision was made to more easily manage the money that came in, and plans to open its cash to existing customers for the same reason initially.
Marcus’ general manager Des McDaid hinted in May 2019 that the bank could participate in the Isa race this year and said in an interview that she would ‘likely’ launch new products, including joint accounts and term deposits.
Marcus closed his easily accessible account and paid 1.05% to newcomers on June 10, after it was flooded with savings that nearly broke the bank’s rules
Earlier this year, it put plans on hold to launch shares and Isa shares in partnership with Nutmeg.
The Isa is said to be just the third savings account Marcus has launched since 2018, after launching a one-year fixed-rate bond in late March. Originally it paid 1.45 percent, but those who sign up now receive only 0.7 percent interest.