Goldman Sachs is closing its Marcus brand to new customers in the UK after deposits reached close to regulatory limits during the Coronavirus lockdown.

The digital challenger savings bank has attracted about £21 billion from more than 500,000 savers since its launch in 2018.

British banking rules demand ring-fencing of retail deposits totalling more than £25 billion, so Marcus has stepped in to stop accepting new applications.

“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,” Des McDaid, head of Marcus UK, told Reuters.

Ring-fencing would require the UK business to become a separate legal entity with its own board and limits on how much capital it could share with the rest of Goldman Sachs.

“Separating Marcus financially and operationally from Goldman Sachs would be a significant change to our low-cost business model, which allows us to pay consistently competitive rates to existing savers,” added McDaid, adding that inflows of more than £8 billion had come from about 100,000 new account holders since January - £4 billion since the lockdown began.

Goldman Sachs stated it was still committed to the retail savings market in Britain and was on track to launch an app and tax-efficient ISA this year. Its 12-month fixed-rate account is also still open to new savers.

Simon Taylor, head of ventures at 11:FS, commented: "Since the onset of the pandemic, we've seen a number of things happen very rapidly: the sudden rise in digital channel usage, digital account sign up and a rush by consumers to savings.

“Marcus had all three of those, supported by the best instant access rate on the market, so it's unsurprising this surge has come to them; but for the industry it says there is too much of a good thing.”

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