LONDON (Reuters) – Goldman Sachs (GS.N) is closing its easy access savings business to new customers in Britain from Wednesday after deposits surged near to regulatory limits during the coronavirus lockdown.

The British arm of digital brand Marcus, which pays market-leading rates to savers starved of meaningful cash returns, has attracted about 21 billion pounds from more than 500,000 savers since its launch in 2018.

However, British banking rules demanding ring-fencing of retail deposits totalling more than 25 billion pounds have prompted its executives to take steps to manage its growth.

“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 Marcus in Britain to become a separate legal entity with its own board and limit how much capital it could share with the rest of Goldman’s businesses.

“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,” McDaid added.

Several British bank executives have said the brand named after Marcus Goldman, co-founder of the Wall Street investment bank, is one of the most potent “disruptors” in the market.

An analysis last month by think-tank New Policy Institute estimated that British households had cut their spending by 57 billion pounds since lockdown began on March 23.

McDaid said that Marcus had achieved inflows of more than 8 billion pounds from about 100,000 new account holders since January, and by 4 billion pounds since the lockdown began, suggesting that a significant slice of household income is being saved.

Marcus has helped Goldman to diversify into consumer banking and provided billions of dollars of cheaper deposit-based funding to fuel its investment banking activities.

Goldman was committed to the retail savings market in Britain and was on track to launch an app and tax-efficient Individual Savings Account this year, McDaid said, adding that its 12-month fixed-rate account is still open to new savers.

The temporary shutdown could represent a blow to millions of savers in Britain by cutting competition and reducing pressure on other banks to match its rates.

Finance product provider last week warned consumers to brace for a “race to the bottom” on savings rates and products after average rates on easy access accounts hit record lows.

Marcus remains open for new accounts in the United States, where total deposits in the first quarter stood at more than $50 billion, up from $42 billion (£33 billion) at the end of 2019.

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