It was obvious from a recent FCA review of “platforms” (i.e. stockbrokers), that many retail investors held large amounts of cash in their portfolios. When folks are feeling the stock market has had a rather long bull run, perhaps they feel it is wise to keep a high level of cash. Or perhaps it’s because they simply can’t be bothered to move it when their high-street bank is offering such trivial rates as 0.2% per annum on deposit accounts. Needless to point out perhaps that unlike in the good old days, most stockbrokers do not pay interest on cash holdings.
But interest rates are rising and new entrants to the savings market are starting to pay decent rates – still not as good as inflation but a lot better than zero. For example, Goldman Sachs have just launched an account named Marcus (after one of their founders). It will be paying 1.5% AER although that includes a bonus rate of 0.15% for the first year only. That probably makes it the top paying “easy access” savings account at present.
It’s an on-line only account and you can only put in up to £250,000. Otherwise it looks to be fairly straightforward apart from the usual complexities of opening a bank account and proving who you, that you are not money-laundering or a suspicious person.
This is definitely a useful initiative and if they get enough customers it might prod the high street banks and stockbrokers to think again.
See https://www.marcus.co.uk/uk/en for more information.
The author has no connection with Goldman Sachs.
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )