Goldman Sachs’ new Marcus savings account, which was launched in the UK in late September, has been a hit with British savers. Offering an interest rate of 1.5% AER (which includes a 12-month bonus rate of 0.15%), UK savers have rushed to open an account, with over 50,000 opened in the first few weeks after the product’s launch.
The Marcus account appears to be a decent easy-access savings product, as it offers flexibility and has no fees. However, if you’re looking to boost your savings this year, there are other products that could help you generate a higher return on your money than the 1.5% rate that Marcus offers.
Here’s a look at several such products.
Nottingham Building Society easy-access account
Those who prefer to keep their money in cash savings may be interested to know that a number of financial institutions have acted in response to the high rate from Marcus and lifted interest rates on their own easy-access savings accounts. One such company is Nottingham Building Society, which has recently increased its easy-access interest rate to 1.55%. And unlike the interest rate offered from Marcus, this does not include a temporary bonus rate that falls away after a year. This could be a solid option for cash savers although one key difference between this account and the Marcus is that it requires a minimum deposit of £1,000 whereas a Marcus can be opened with just £1.
Numeos is an innovative new app that connects savers to specialist UK partner banks and fintech companies, and helps people earn a higher rate of interest on their money. With Numeos, your money sits in an account with the bank of your choice (it’s therefore 100% protected by the Financial Services Compensation Scheme (FSCS)), however, after opening an account, if you take a few minutes to explore the products offered from Numeos’ fintech partners through the app, Numeos will top up your interest rate. Right now, it is offering a one-year fixed term rate of 2.6% (including the top up), so it could be worth a look for those happy to lock their money away for a year.
If you’re willing to take a little more risk with your money in pursuit of higher rates, check out Funding Circle – a platform which lets you lend your money to small businesses.
Funding Circle is easy to use. With the help of its automatic lending tool you can easily lend your money to many different businesses and in the process, pick up a higher return on your savings. The company claims that 93% of its customers who have invested £2,000 or more for a year and diversified using its automatic tool have generated returns of 4% or higher. That’s certainly a better rate than the rates offered by cash savings accounts, although note that the risk is higher.
Stocks & Shares ISA
Lastly, if you’re serious about boosting your savings, it could be worth considering an investment in the stock market through a tax-free Stocks & Shares ISA. Of course, stocks are more of a long-term investment than the three products mentioned above because they’re higher risk. However, in the past, stocks have generated returns of around 7%-10% per year, on average, over the long run, which is significantly higher than the returns from cash. As always, the higher the risk, the higher the potential reward.
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