First Direct No Longer Values Loyal Custom

brookerbabyisababy

first direct has launched a market leading fixed rate cash e-ISA at 5.85% AER (6.125% tax free). The cash e-ISA is available until 6 November and the rate fixed until 15 June 2009. As a consequence it has banned existing customers from benefiting from this new rate. As a loyal customer I am stunned that they have done this. If they intended to launch a new product they should have named it differently and/or at the very least offered it to they existing customers. Come on First Direct do something about this.

LucyTheDwarf

Where does it say new customers only?

brookerbabyisababy

Sorry I should have made myself clear - people who already hold the Cash e-ISA. Checkout the rates - https://www.firstdirect.com/rates - it is much clearer.

LucyTheDwarf

Ah, I thought you must have meant that. I suppose there's nothing to stop you transferring to another provider and then back to FD, but it's high on the hassle factor.

Well, FD has no need to woo you with a high rate, as it already holds your money. The consumer is King... try taking your money elsewhere http://www.moneyfacts.co.uk/savings/bestbuys/mini-cash-isas-accepting-transfers-in.aspx

Milarky

It is effectively '6.3%' for 9 months and '4.5%' (variable) thereafter

Accepts ISA transfers from outwith First Direct:

transfer any ISA balances to us, held with other providers, from previous or current tax years. Transfers from existing first direct ISAs are not permitted.

... this is good for me as I have an ISA with YBS coming out of a fixed rate on 1st October

.. I also have the Regular Saver FR ISA from FD this year (fixed rate ends 23 April 2009) It seems I would have to move this out to avoid the dropsy rate on this account at that time....

(This is a good offer but relies on customer inertia to not arrange a transfer out at the end)

brookerbabyisababy

Am I wrong or are they penalising existing customers who already hold their Cash e-ISA? their rates website is quite useful https://www.firstdirect.com/rates

Milarky

I can't see anywhere (including the e-ISA terms and conditions) that says you can't have more than one e-ISA. It may be implicit, of course, that you can't but it is worth asking First Direct for clarification (e.g Nationwide allows multiple 'fixed rate' ISAs - Yorkshire BS allows you to open dupicate ISA 'instant access' accounts - I've just done it)

The other option is to transfer out (cancelling the old account) then re-apply through a transfer in

(again, I think it is 'inertia' which FD is relying on rather than onerous terms and conditions)

going2die_rich

First Direct have never been loyal to it's customers. Not many banks are now loyal.

Although if the credit crunch was to have another big bank collapse out of the blue then I think things would change. As many banks are already trying to attract savers again instead of those in debt like in the past.

Since First Direct got rid of the good savers in place of those defaulting payments claiming they were "risky customers", it'll no doubt be regretting it's decision now. It's a mickey mouse bank anyway.

brookerbabyisababy

This is just like that Nationwide advert?:j

Rafter

No bank of building society can afford to offer best buy rates to their existing customers and rely on inertia and T&Cs to restrict transfers between old and new customers.

If they did offer best buy rates to everyone, either the cost of loans and mortgages would have to go up, or they would go bust.

You can't offer 6.125% on ISAs and charge 5.99% on mortgages and still cover your costs or make any money.

Ultimately sites like this will help reduce the gap between new and existing customer rates (as they did with credit card offers and stoozing) but it seems there will always be a benefit from switching from one deal to the next if you can be bothered.

Building societies (like nationwide) will be better than the banks because at least they don't have to pay dividends to their shareholders, but they do have to compete in best buy tables just like everyone else.

R.

brookerbabyisababy

I am not saying they should be prevented from launching new products - all I am saying is they should not up the rate on existing products and say new customers get a fixed rate while existing customers with the same product get the variable rate for the same product.