Goldman Sachs is turning away savers who have spent lockdown putting money aside and looking to reorganise their finances.
The US banking giant has closed its UK easy-access savings account – Marcus – to new customers after a surge in interest from savers.
The move was prompted by deposits to the digital account reaching close to the limit allowed under regulations.
Marcus has been paying close to market-leading rates to savers.
The retail savings arm of the investment bank, named after the bank’s founder, Marcus Goldman, was launched in the UK nearly two years ago with some fanfare owing to its competitive rates of interest.
Offering rates of just over 1%, versus an industry average of just 0.3%, it has attracted more than 500,000 savers.
But bosses have had to step in to control its growth, due to UK rules demanding that retail deposits of more than £25bn should be ring-fenced to protect the banking system – something that would require Marcus to become a separate legal entity, driving up its costs.
The coronavirus impact has meant some households are saving more owing to the leisure and hospitality sector being closed. Existing savers have also taken the opportunity to get on top of their finances.
“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,” said Des McDaid, head of Marcus UK.
Commentators said the move was another blow for savers.
Financial information service Moneyfacts has warned consumers to brace for a “race to the bottom” on savings rates and products after average rates on easy-access accounts hit record lows.
It follows the Bank of England’s decision to slash the base rate to 0.25% in an emergency move to support the economy during the pandemic.
Sarah Coles, from investment firm Hargreaves Lansdown, said: “The savings market has been engulfed by waves of cuts over the past few months, and Marcus’s easy-access account has been washed ashore.
“These waves are self-perpetuating. The most competitive account attracts too much money, so the bank cuts back.”
Marcus said it hoped to reopen the account to new customers again later in the year.