Northern Rock saving rate dropping

iltisman

I Had an Email from NR saying the silver saver rate will drop to 3.92% net on their monthly online account wef 1 Nov.

bristolleedsfan

E-Saver, I read in the forums favourite newspaper :rotfl: on Wednesday is reducing by 0.6% in November.


New fixed rate account @ 4.5% :eek:


http://www.northernrock.co.uk/savings/fixed-rate-bonds/fixed-rate-capped-bond/

opinions4u

Anyone would think far too many savers have panicked, jumped ship from their existing providers and piled in to the now seen as safe Northern Rock! Who don't need the money!

Here's another theory:

Some of the other banks have had wobbly share prices. Savers jump ship looking to take advantage of the safe haven that is Northern Rock - it's a run on many of the banks (not quite NR standard, but still significant).

This leaves banks with a big hole in their balance sheet, caused in part by the government's 100% guarantee to Northern Rock.

The other banks then need to raise additional capital because they can't replace these balances with wholesale funding. The only place they can get this is from the government. Who then have to part nationalise the banks to protect taxpayers interests.

While I don't think the end result was part of the plan, I have little doubt that the skewing of the compensation scheme by our own government using NR and by the Irish has contributed massively to the bail out we see today.

Profitable banks have been brought to their knees by all this! It's an extraordinary case of the private sector not working properly and state interference actually making things even worse!

Reaper

opinions4u wrote: »

Savers jump ship looking to take advantage of the safe haven that is Northern Rock - it's a run on many of the banks

Fortunately the government anticipated this and set the limit for NR savings at 1.5% of the market. That is why most of their accounts are now closed to new customers.

Personally I would take it further and apply market rules to NR. They ought to adjust their interest rates to reach 1.5% naturally rather than through regulation. That would mean dropping them much further until only those savers obsessed with safety remain. It would also mean NR became more profitable and able to pay back its debts to the government faster.

I realise this view will not be popular with NR savers.

tpl288

Reaper wrote: »

Fortunately the government anticipated this and set the limit for NR savings at 1.5% of the market. That is why most of their accounts are now closed to new customers.

Personally I would take it further and apply market rules to NR. They ought to adjust their interest rates to reach 1.5% naturally rather than through regulation. That would mean dropping them much further until only those savers obsessed with safety remain. It would also mean NR became more profitable and able to pay back its debts to the government faster.

I realise this view will not be popular with NR savers.

If NR drop their rates, I will move money to Australia, higher savings rates there and their Government has guaranteed on all commercial bank deposits for THREE years with no threshold.

I would encourage UK savers (fixed term savers) to consider this, then perhaps the UK Government will re assess owning NR. Capital is easily moved offshore, perhaps everyone should move their money to Ireland? Ireland govt has guaranteed all deposits. At the end of the day, its people's hard earned savings at stake here.

These are not normal times, therefore governments are playing catch up on policies without considering significant consequences.