Natiowide's Loyalty Bond
Comments
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caveat_emptor wrote: »Perhaps someone with an understanding of NWs business model could explain.
I don't know anything abut NW's business model in particular, but in general with the BOE base rate at 0.25%, banks and building societies can generally borrow money a lot cheaper than from their saving customers. They have to keep offering some sort of saving products ready for when the market changes and they do need saver's again.0 -
They have to keep offering some sort of saving products ready for when the market changes and they do need saver's again.
The first part of your post I agree with, the second part I'm not so sure about.
Nationwide's advertising budget must be through the roof at the moment and it seems odd for them to spend money advertising a savings account which is only available to existing customers and frankly is not at all attratctive.
I don't understand the logic of not wanting saver's money because you can get it cheaper from the BoE, but then spending money advertising a not very good product to attract additional deposits from existing customers.
Nudging the Loyalty Saver rate back up to say 0.85% might have the same effect drawing in the additional deposits, without the need to do any advertising - an email to existing account holders would do the trick."In the future, everyone will be rich for 15 minutes"0 -
Yep, BoE invented (with Maybenot's authorisation) yet another £100,000,000,000.00 last August to lend out to the banks at 0.25% - nice little earner. Good job we (almost) have a government for eveyone, not just the privileged...0
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It is not aimed at the sort of people who post on this board, it is aimed at people who currently have their savings sat in a bog standard account paying 0.5% or less.
Also there are still a lot of people who don't want an account with some brand new challenger bank they have never heard of before. Compared to other high street names, the Nationwide rates are competitive.0 -
caveat_emptor wrote: »But not for much longer at NWs present interest rates and where is the cash going to come from to support mortgages.
Perhaps someone with an understanding of NWs business model could explain.
I think you underestimate the apathy of UK savers. Nationwide don't need to offer market leading rates because there are a sufficient number of people who will save with Nationwide because it is Nationwide or because they want a recognised name to save with. There are very few better savings rates with the legacy national high street banks and building societies than what Nationwide offer. Their strategy is for their average member interest rate to be higher than the market average as measured by the Bank of England, but to also manage retail deposit balances against the demand for lending. I'll be surprised if Nationwide don't grow their retail deposits this year.0 -
I'll be surprised if Nationwide don't grow their retail deposits this year.
Given they were the only bank not to cut their best current account and RS interest rates in the last round - and show no sign of doing so now - I think I'd agree with you there."In the future, everyone will be rich for 15 minutes"0 -
I wonder how many MSE regulars have 10% of their cash deposits with Nationwide though...
...mind you, it would take an awfully large number of 'new' FlexDirect accounts to equal 10% of UK deposits
I have at least 50% of my cash with Nationwide
Remember the saying: if it looks too good to be true it almost certainly is.0 -
There are several banks offering higher rates on smallish sums. NW's 5% on £2500 and £500pm is about the best of these.caveat_emptor wrote: »The much advertised Loyalty 5 Year Fixed Rate Bond offers interest at 1.65% AER. Advertising must be costing a bomb. There are many banks offering higher interest rates, so much for loyalty.
[STRIKE]Who is offering better than 1.65% on £85,000 or more though?[/STRIKE] ETA Loads, I am informed. I was looking at Yorkshire Bank's offerings just yesterday, and missed the two higher rates among the plethora of 0.01%s
Probably no-one, but NW have to set a minimum deposit somewhere.caveat_emptor wrote: »NW will point out the minimum deposit is £1 but who in their right mind would deposit £1 for 5 years without being able to add to it?.
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More relevantly, the upper limit is way more than almost anyone would want or need.
Further, although you cannot add to an existing account, you are free to open more accounts as you need.Eco Miser
Saving money for well over half a century0 -
There are several banks offering higher rates on smallish sums. NW's 5% on £2500 and £500pm is about the best of these.
Who is offering better than 1.65% on £85,000 or more though?.
BLME (2.55%), Atom (2.40%), Milestone (2.30%), Paragon 2.25%, Vanquish 2.21%, Close Bros, secure Trust, Shawbrook, UBL 2.2%, Al Rayan, Ikano, Wesleyan, Oak North, Masthaven, Charter Savings, Aldermore, Dudley BS, Tesco, Hampshire Trust, Zenith, Axis, Cambridge BS, United Trust, Clydesdale, Kent Reliance, Yorkshire Bank, Britannia, Hodge, UBI, Virgin Money, ICICI, RCI0 -
I would not lock away a large sum for just 1.65% ;rather put into Premium Bonds, which at least have a fun element without loss of stake and pay out quite well if you have larger sums (a few £100s are unlikely to attract a win).0
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