A new ISA account from Marcus arrives in the UK in April
Marcus Bank has announced that it is launching a tax-free savings account on 6th April 2021, after suggesting for a couple of years that it was about to enter the ISA market.
Anyone who opens an account will enjoy a best buy rate of 0.4% tax-free interest on their cash deposits.
Limited Options For Applicants
There are some drawbacks to the ISA offered by Marcus Bank. Firstly, only existing Marcus Bank customers are able to apply to open one. Secondly, customers will be unable to transfer their ISA from the previous year into the new account – it must be new.
It’s believed that these limitations are designed to minimise the number of customers who are able to open the account, as too many could force changes for the structure of the bank.
Marcus Bank is owned by Goldman Sachs, which uses the deposits in the UK arm of its business to help finance their investment banking operations. If Marcus Bank’s deposits reached a certain limit then Goldman Sachs would be forced to ring-fence those funds and would not be able to access them to fund investments.
It echoes moves by the bank last year, when it closed its easy-access account to new customers in June. The account, which was considered to be market-leading, has around £21billion in deposits from around half a million account holders, which is close to the £25billion limit which would’ve triggered the ring-fencing.
It’s our first new product this year; we are working on exciting new offerings for the rest of the year and beyond, which will continue bringing value to our customers and help them make the most of their hard-earned money.
Marcus managing director Des McDaid
Disappointing ISA Season
While there are expectations that the offer from Marcus Bank will be limited, it is still a rare bit of good news for savers looking for great ISA deals ahead of the new tax year.
Options have been restricted due to the financial circumstances of the world as part of the Coronavirus pandemic and there are fewer new ISA options available.
One notable account is an ISA that has been launched by Nationwide. It pays a fixed rate of 0.75% for the next 18 months and is available to existing customers.
There is also a £50 bonus for any customers who deposit over £10,000 which could result in an equivalent interest rate that breaks the 1% barrier, which is almost unheard of with the state of the market.
The total number of ISA products available at the start of March was just over 330, which is a drop from around 420 at the same time last year. The impact of the economy over the last 12 months has had a stated and profound impact on the savings offerings from the country’s banks.