The new retail bank adds to the growing list of rivals that are threatening to steal customers away from the UK’s four biggest lenders Lloyds Banking Group PLC (LON:LLOY), Barclays PLC (LON:BARC), HSBC Holdings PLC (LON:HSBA) and Royal Bank of Scotland Group PLC (LON:RBS).
"More competition in the savings market is sorely needed. Savers have suffered record low-interest rates for a long time, so if a newcomer with a higher rate can shake things up, savers will benefit," said Laura Suter, personal finance analyst at investment platform AJ Bell.
Goldman’s online retail bank, named Marcus after the group’s founder, is offering an initial interest rate of 1.5% -- above the amount easy access savings accounts currently offered in the UK. The next best rate can be found at Yorkshire Building Society, where account holders receive a savings rate of 1.41%.
To open an easy access account with Goldman, you need to put in a minimum of £1 and be a UK resident aged 18 years or over.
Marcus was first launched in the US in 2016 before being introduced to the UK.
The UK retail bank opened to Goldman's 6,000 employees in Britain before being rolled out nationwide on Thursday.
Managing director of Marcus, Des McDaid, said on Thursday that it was encouraging to see people in the UK still saving in an era of low interest rates for the past decade but added that "it does seem like we’ve totally lost interest in interest".
"That’s not surprising given that most savers in the UK have been on the wrong end of extremely low-interest rates for years now so don’t think it’s worth their while and, if you think about it, some of the younger generations have never actually known a good interest rate," he said.
“Things have to change – and that’s from both the banking industry perspective and the UK’s hard-working savers.
“It’s why we’ve launched Marcus today with an Online Savings Account with a competitive interest rate of 1.50% AER%."
A middle ground between digital high-street banks and online-only start-ups
Suter thinks Marcus provides a middle ground between the high-street banks and the new, digital-only start-ups. It will appear much like a start-up with accounts only available online but with the backing of a global investment bank, she said.
The AJ Bell analyst added: “Savers have been reluctant to move from well-known, high-street brands to unheard of start-ups, so this may offer an appealing alternative.”
“That said, Goldman Sachs’ name has not always been covered in glory, once being dubbed ‘the great vampire squid’ and for some, the banking giant’s reputation from the financial crisis will still be too fresh.”
Marcus shows promise for UK savers but could slash rates later, says AJ Bell
Suter noted that Marcus has maintained a high savings rate in the US, which shows promise for UK customers.
However, she warned that many banks have launched with market-leading rates only to slash them when they have lured in enough customers.
“Whether Marcus is truly going to maintain its higher interest rate in the UK remains to be seen,” she said.
“It’s also worth noting that while Marcus is offering a market-leading rate, it’s only 0.09% higher than current top-payer Yorkshire Building Society – amounting to an extra 90p a year for someone with £1,000 invested.”