Goldman Sachs closes Marcus savings business to new UK clients

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Goldman Sachs closes Marcus savings business to new UK clients

Goldman Sachs has said it is closing its easy-access, higher interest, savings business to new clients in Britain from today after deposits soared to nudge regulatory limits during the covid-19 lockdown.

The US-owned subsidiary, seen by many in the industry as an effective disruptor, has seen more than £21bn deposited across over 500,000 new savings accounts since Marcus opened for business in 2018, according to Reuters.

The Reuters report said that, following the 2008 banking crisis, British retail banking rules stipulate any retail deposits totalling £25bn or more need to be ring-fenced, 

Separating Marcus financially and operationally from Goldman Sachs would be a significant change to our low-cost business model, which allows us to pay consistently competitive rates to existing savers."

Des McDaid, the head of Marcus in the UK, told Reuters the issue has come to ahead as many people chose to save more of their money during lockdown. "We've really seen our growth accelerate under lockdown as people hold off on discretionary spending and take time to reorganise their finances and get the best deal for their money, " he explained. 

McDaid explained the ring-fencing option was not attractive to Goldman Sachs: "Separating Marcus financially and operationally from Goldman Sachs would be a significant change to our low-cost business model, which allows us to pay consistently competitive rates to existing savers."

In a statement Marcus by Goldman Sachs said: "The decision to pause new applications has been made in order to manage our deposits in line with our business plan, and so that we can continue providing competitive rates to our existing online savings account customers."

"We remain fully committed to our customers and the UK market, and hope to reopen the online savings account in the coming months, depending on market conditions."

 

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Christopher Copper-Ind

Christopher Copper-Ind is editor-in-chief of International Investment. Before this, he was editorial director of The Business Year, from 2014 to 2017.