Best easy-access savings deals: Marcus Bank boosts rate


Marcus Bank has upped the rate on its popular easy-access savings account nudging it higher in the independent This is Money best buy tables.

The Goldman Sachs backed bank has increased both its online savings account cash Isa deal from 0.5 per cent to 0.6 per cent.

However, it continues to offer an additional fixed-rate bonus of 0.1 per cent on both accounts which means savers will secure 0.7 per cent in total for one year.

Existing customers will get the uplift to 0.7 per cent added automatically, but need to log-in to their account to add the extra 0.1 per cent.

The Goldman Sachs backed bank has increased both its easy-access account cash Isa

For those that have already boosted their account previously, the bonus rate will expire sooner depending on when they added it to their account. 

Savers can open an account with Marcus with as little as £1 can deposit up to £250,000.

Cash is protected up to £85,000 per individual by the Financial Services Compensation Scheme in the case of joint savings accounts that doubles to £170,000.

Someone saving £10,000 into the Marcus account can expect to see a return of £70 over the course of the year. 

The move by Marcus Bank sees it join an increasing number of providers upping rates, following the Bank of Englbase rate rise last month.

 

How has Marcus Bank’s rate changed since 2018?  
Date  Rate 
27/9/2018 1.5%
10/3/2020  1.45% 
7/5/2020  1.35% 
30/5/2020  1.2% 
4/9/2020  1.05% 
12/10/2020  0.7% 
11/12/2020  0.5% 
16/3/2021  0.4%
1/7/2021  0.4%* 
29/9/2021  0.5%* 
09/03/2022  0.6%* 
Source: Savings Champion/This is Money                                                              *Savers can opt into 0.1% rate boost

However, some will see its 0.1 percentage point rise as a little disappointing, given the plethora of easy-access deals currently paying 0.7 per cent or higher.

Its decision is likely in part to avoid it hitting £25billion in deposits breaching British banking rules.

If it were to do this, it would be forced to ring-fence its UK operations leave it unable to use the money to finance its London-based investment banking unit. It has previously come close to surpassing this. 

James Blower, founder of The Savings Guru said: ‘I’m not surprised that Marcus has been relatively cautious with their increase only moving up to 0.7 per cent on easy-access.

‘They haven’t publicised their deposit levels recently but have to keep under £25billion to keep within ringfencing limits.

‘I expect they’ve seen reasonable outflows in the past couple of months, as they’ve dropped down the tables, I’d suggest their balances have dropped below £20billion to somewhere around £18-19billion.

‘This move will be designed to lift balances back up but not to bring in huge levels of inflows.’

However, with inflation reaching 5.5 per cent as of January expected to peak at around 8.3 per cent this year, the Bank of Englis expected to further up the base rate over the coming months.

This will likely mean savings rates will continue to rise at the top of the market, meaning Marcus may increase its rates again soon.

‘Interest rates on savings are increasing I expect further rises to come,’ said Blower.

‘With rates ticking upwards, I believe that Marcus will have to increase again in April or May to keep pace.’

How does it compare with other deals?

Although the Marcus rate rise will be good news for the many savers who already have an account opened, it may not be enough to entice new savers in.

There are better deals currently on offer for those savers currently on the hunt for easy access accounts.

Cynergy Bank is currently offering a bonus rate for the first year paying 0.8 per cent, whilst Tandem Bank Atom Bank are paying 0.77 per cent 0.75 per cent respectively. All three challenger banks are backed by FSCS protection.

For those looking to stash away large amounts it would also be worth considering Yorkshire Building Society’s Internet Saver Plus issue.

Although those with balances between £1 £10,000 will receive a 0.6 per cent rate, savers with a balance between £10,000 £50,000 will benefit from a rate of 0.77 per cent on their savings. 

Those with in excess of £50,000 will earn a best buy 0.82 per cent. Meanwhile, those who have a current account with Virgin Money or open one can get a 1 per cent rate on balances up to £25,000. 

Blower adds: ‘Savers with large balances should definitely look at Yorkshire’s deal whilst Tandem’s 0.77 per cent rate will appeal for those with smaller balances, given its £1 minimum balance.

‘Savers prepared to lock away cash for a little longer should also consider Zopa – although their 0.72 per cent easy access rate is not the highest, it has 7 day, 31 day 95 Day notice account pots which pay excellent rates of 0.75, 0.85 1.05 per cent respectively.’

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Should you invest in debt funds to create a retirement corpus?


I have suggested investing in mutual funds to my son for building his retirement corpus. He can comfortably invest at least 20,000 per month in mutual funds. Also, please suggest whether he should invest in debt funds for the purpose.

– Name withheld on request

(Query answered by Naveen Kukreja – CEO& Co-founder, Paisabazaar.com)

Equities as an asset class outperform both inflation as well as fixed income instruments by a wide margin over the long term. So, I would recommend your son to invest in equity mutual funds, not in debt funds, for building his retirement corpus. He can distribute his monthly investible surplus equally through SIPs in direct plans of: HDFC Index Sensex Fund; Mirae Asset Large Cap Fund or Axis Bluechip; Axis Midcap Fund or PGIM India Midcap Opportunities Fund; Parag Parikh Flexi Cap Fund or PGIM India Flexi Cap Fund. If he has the scope of saving taxes under Section 80C, then he can invest in direct plans of Axis Long Term Equity Fund and/or Mirae Asset Tax Saver Fund through SIP.

As equities can be volatile in the short term, he can invest in fixed income instruments like debt funds or fixed deposits to meet his short term financial goals or park his emergency fund. Given the ongoing rising interest rate regime, I suggest that he invest in bank FDs offering interest rates of 6% p.a. above. Some of the scheduled banks offering such interest rates include SBM Bank, Jana Bank, Suryoday Bank, Utkarsh Bank, Ujjivan Bank ESAF Bank. He should have FD tenures of 1-2 years, without an auto-renewal option, as the may get the opportunity to renew his FDs at higher interest rates.

In case, interest rates after FD maturity reach below 6% p.a., he can invest in direct plans of short-duration debt funds of HDFC Short Term Fund ICICI Prudential Short Term Fund, for building his fixed income corpus.

In case your son has a higher risk appetite, he can invest a part of his fixed income corpus in the direct plans of conservative hybrid funds like Kotak Debt Hybrid Fund ICICI Prudential Regular Savings Fund. As these funds have to invest 10-25% of their corpus in equities equity-related instruments, they can potentially generate higher returns than debt funds fixed deposits.

(Sending queries views at [email protected])

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National Express Stagecoach merger gatecrashed by German investor DWS


Stagecoach shares soared after a German asset manager gatecrashed its planned merger with rival National Express.

In December, the bus, coach tram operator agreed to an offer from National Express that valued it at around £470m.

But the Stagecoach board has now withdrawn support for that offer instead backed a rival bid from DWS Infrastructure worth 105p a share or £595million.

All aboard: The Stagecoach board has backed the new bid from German asset manager DWS Infrastructure worth 105p a share or £595m

Stagecoach shares jumped 36.9 per cent, or 28.25p, to 104.8p while National Express rose 25.6 per cent, or 49.2p, to 241.8p.

The tie-up would have seen the businesses merge with Stagecoach investors owning 25 per cent of the combined entity while National Express shareholders took the remaining 75 per cent.

National Express acknowledged the swoop by DWS but advised Stagecoach shareholders to take no action that it would make a further announcement soon.

The bidding war has pitted founders Sir Brian Souter Dame Ann Gloag – the brother sister who set the firm up in 1980 – against each other.

While Souter has backed the National Express bid, Gloag has thrown her weight behind DWS.

Analysts at broker Peel Hunt said the deal was ‘clearly positive for Stagecoach’ as well as the wider bus rail sector, which they noted had been hit hard by higher fuel prices. 

They also highlighted that a ‘sharp decline’ in National Express’s share price in recent weeks meant its all-share offer was now worth only around 70p per share, a third less than the new bid from DWS.

Stock Watch – Renalytix

Renalytix soared after launching a kidney-disease-testing platform in the US.

The group’s myIntelX portal will allow physicians to order its KidneyIntelX test, which is designed to identify patients with Type 2 diabetes that are at high risk of rapid progression of kidney disease.

The launch forms part of a planned expansion of KidneyIntelX to healthcare systems in US states including New York, Mississippi Utah before the end of June. 

Shares surged 23.8 per cent, or 68p, to 353p.

The FTSE 100 jumped 3.3 per cent, or 226.61 points, to 7190.72 while the FTSE 250 climbed 4.4 per cent, or 851.58 points, to 20069.20. 

The rebound came as traders hunted for bargains amid hopes that recent selloffs could provide a fertile hunting ground for potential takeover bids as buyers looked to snap up companies on the cheap.

‘With share prices down across so many sectors, someone looking to acquire could find more attraction valuations in the current market so opportunistic bids could become a theme over the coming months,’ said AJ Bell investment director Russ Mould.

However, he added that convincing shareholders to accept a takeover swoop would be a ‘key challenge’ as there would be ‘a strong argument to suggest that current share price weakness may only be short-lived’.

There was some selling among the major miners as investors took profits after soaring commodity prices pushed shares higher in the sector. 

Rio Tinto was down 1.2 per cent, or 70p, at 5817p while Fresnillo dropped 7.3 per cent, or 58.8p, to 749.6p, Glencore slipped 1.3 per cent, or 6.1p, to 470.1p, Antofagasta fell 1.3 per cent, or 20p, to 1498p Anglo American dipped 2.1 per cent, or 79p, to 3753.5p. 

Oil stocks also dipped as crude prices pulled back slightly from recent highs. Shell was down 1.7 per cent, or 35p, at 2004.5p BP fell 2.2 per cent, or 8.45p, to 371.55p.

Meanwhile, firms hit hard by the outbreak of war were on the rise as traders looked for cheap stocks. British Airways-owner IAG gained 11 per cent, or 13.38p, to 134.66p while easyJet ascended 12.6 per cent, or 56.2p, to 503.2p Wizz Air jumped 15.6 per cent, or 392p, to 2909p.

Banking stocks also mounted a recovery with Lloyds rising 8.2 per cent, or 3.42p, to 45.38p, Barclays adding 6.3 per cent, or 9.54p, to 161.8p, NatWest up 6.1 per cent, or 11.95p, at 209.4p, HSBC bouncing 4 per cent, or 18.65p, to 489p Standard Chartered higher 6.3 per cent, or 29.4p, at 493.1p.

Blue-chip engineer Electrocomponents surged 118 per cent, or 102p, to 970p after upgrading its forecasts.

The group expected its full-year profits to be ahead of estimates after highlighting better than expected trading in the nine weeks to March 4.

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Calls for de-listing as Russian firms on FTSE fail to condemn invasion


Now kick them off the London market: Russian FTSE firms fail to condemn Ukraine invasion sparking calls for immediate de-listing

Russian firms on the London stock market faced a fresh backlash last night after they finally broke their silence on the crisis in Ukraine – but failed to condemn the invasion.

Steelmaker Evraz, whose biggest shareholder is Chelsea FC owner Roman Abramovich, said it was ‘deeply concerned saddened’ by what it called the ‘Ukraine-Russia conflict’ hoped a peaceful resolution could be found soon.

At the same time, miner Polymetal International said the ‘unfolding tragedy in Ukraine is horrifying heartbreaking’ as it called for ‘a lasting peaceful solution to the conflict’.

Weak: Evraz, whose top shareholder is Chelsea FC owner Roman Abramovich (pictured), said it was ‘deeply concerned saddened’ by what it called the ‘Ukraine-Russia conflict’

But neither firm – both members of the FTSE 100 until the end of next week when they will be relegated following a slump in their share price – criticised the invasion ordered by Russian president Vladimir Putin in their statements to shareholders.

The tone of the updates triggered fresh calls for companies with links to the Kremlin to be removed from the London stock market altogether.

Sam Armstrong, director of communications for the Henry Jackson Society, a national security foreign policy think tank, said the failure of the companies to condemn the conflict ‘in the strongest terms’ represented ‘a complete failure of leadership’.

‘Any company with strong links to the Putin regime should be delisted from the London Stock Exchange immediately.’

The sentiment was shared by financier anti-corruption campaigner Bill Browder, who said Ukraine was experiencing a ‘humanitarian catastrophe’ ‘everyone has a duty to cut off any flow of funds to the Russian state’.

The biggest shareholders in Evraz are Abramovich, company founder chairman Alexander Abramov former chief executive Alexander Frolov, who combined own nearly 58 per cent of the company. All three were featured on a list of Russian oligarchs released by the US Treasury Department in 2018.

In what was nebulously dubbed an ‘update on certain matters’, the company flagged that despite sanctions imposed on Russia following the invasion there had been ‘no material direct impact’ on its day-to-day operations, although its supply logistics chains were experiencing ‘frictions’.

However, there were creeping signs of uncertainty as the firm cancelled a dividend payment worth £553million as a result of the conflict. 

The decision will deprive Abramovich of around £159million while Abramov will lose out on £107million Frolov £53million. 

Polymetal also avoided any direct condemnation of Putin or the Russian invasion, saying instead that the situation was ‘horrifying heartbreaking’.

Nearly 24 per cent of Polymetal is owned by its founder Alexander Nesis, who set up the firm in 1998 in St Petersburg through his ICT Group. He was also named on the US Treasury list.

The gold miner said operations remained ‘undisrupted’, although the company warned sales of gold bullion in Russia had been impacted by sanctions by the US, the EU the UK.

Another miner, FTSE 250-listed Petropavlovsk, also appeared to shrug off the effects of sanctions.

It said the company’s operations in the far east of Russia were continuing ‘without interruption’ that no member of the group had yet been named on any sanctions lists. The firm did not offer any condemnation of the invasion of Ukraine.

Evraz, Polymetal Petropavlovsk have seen their stock prices hammered this year. Evraz is down nearly 85 per cent in the year-to-date, Polymetal 88 per cent Petropavlovsk 83 per cent.

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Marks & Spencer buys stake in sportswear retailer The Sports Edit


Marks & Spencer buys stake in online sportswear retailer The Sports Edit as it looks beef up its brands

Marks & Spencer has bought a stake in a sportswear seller. 

London-based The Sports Edit stocks clothing from giants such as Adidas Nike smaller brands such as Free People Movement. 

It also sells nutrition products offers online health fitness content through its website. 

Style stakes: London-based The Sports Edit stocks clothing from giants such as Adidas Nike smaller brands such as Free People Movement

The online retailer was founded in 2015 by Nick Paulson-Ellis, who will stay on as chief executive with support from the High Street giant. 

The terms of the deal were not disclosed but it will eventually see M&S take full ownership of The Sports Edit. 

It is the latest move in the 138-year-old retailer’s Brands at M&S Strategy aimed at boosting online sales. 

The investment furthers M&S’s focus on active leisurewear. The market boomed through Covid, growing 35 per cent in two years to be worth £900million annually. 

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