Savings....hypothetical question....

ebyard

We all know banks are screwing us careful savers to prop up their profits due to the cuts in lending rates.

So....would it be commerically sensible for an organisation which doesn't do much lending (ie. no mortgages) to offer attractive savings rates for instant access accounts?
Surely there is some money to be made here?

realaledrinker

So how would this organisation get its income to pay you your attractive savings rate if it did nothing with the money you deposited with them?

Lokolo

realaledrinker wrote: »

So how would this organisation get its income to pay you your attractive savings rate if it did nothing with the money you deposited with them?

Money trees, duh

Dooooooooooooooonut

he could invest in corporate bonds I suppose.... that would be the idea.

Remember savings are essentially the bank borrowing your money... corporate bonds are the same idea but presumably with less credit worthy institutions (although this is debatable now!)

Anyway I really don't understand why people give a flying !!!! about a few percent on a savings rate yet at the same time give their money to fund managers on a far more volatile set of earnings taking anything but a nominal fee... does not compute!

On preview, I am getting very !!!!ed off about all the censorship of proper four letter anglo saxon words on this forum!

jamesd

ebyard wrote: »

So....would it be commerically sensible for an organisation which doesn't do much lending (ie. no mortgages) to offer attractive savings rates for instant access accounts?
Surely there is some money to be made here?

Tesco does now. Cheaper than borrowing money from the banks to finance its operations, I suppose.

opinions4u

ebyard wrote: »

We all know banks are screwing us careful savers to prop up their profits due to the cuts in lending rates.
Do you really think the banks are very profitable at the moment?

So....would it be commerically sensible for an organisation which doesn't do much lending (ie. no mortgages) to offer attractive savings rates for instant access accounts?
Surely there is some money to be made here?
Do you think that this organisation should collect money from savers, stick it in a safe and wait for the interest fairies to come along once a year?

The only way they can make money is by using your money to do other things. Some nice Icelandic chaps tried it but it didn't quite work out.

If you want the risks of savings accounts backed by risks that are higher than mortgages, try Zopa, or alternatively why not just pile in to a tracker fund and take the risks associated with the markets.

Your post is unbelievably naive.

Answer? No.

opinions4u

jamesd wrote: »

Tesco does now. Cheaper than borrowing money from the banks to finance its operations, I suppose.

No. More to do with building up a customer base and deposit base to allow them to operate their new wholly owned personal finance business.

dwsjarcmcd

ebyard wrote: »

We all know banks are screwing us careful savers to prop up their profits due to the cuts in lending rates.

So....would it be commerically sensible for an organisation which doesn't do much lending (ie. no mortgages) to offer attractive savings rates for instant access accounts?
Surely there is some money to be made here?

In many cases this is just not true, and where it is the case, customers tend to be on old accounts and the banks are preying on uninformed and lazy customers. There are plenty of savings accounts paying 3.5 - 3.75%, which means the bank loses 1.5 - 1.75% per annum.

Where is the money to be made?