Nat West - how long will the 3.5% rate last on pre 15th May ISA's

andynorth2009

Based on previous experiences have we any idea when Nat West is likely to reduce the rate on the pre 15th May accounts. The information isn’t easy to find in the terms and conditions.

TIA Andy

Baldur

As it's a variable-rate account, the rate payable is basically at the whim of Natwest, which everyone discovered when they dropped the rate paid to accounts opened from 15th May.

musehead

Any info on when/how much they will drop it by won't be in the T&Cs. They can drop it by anything, whenever they want to. My guess is they'll leave it for a month or two and then drop to 2.5%. Most people won't bother transferring back out again.

Dustykitten

Thanks for this thread, I was wondering the same - one of my transfers is complete before the 15th but the other is still in transit so expect that will be at the new lower rate.

Baldur

Dustykitten wrote: »

Thanks for this thread, I was wondering the same - one of my transfers is complete before the 15th but the other is still in transit so expect that will be at the new lower rate.

According to their website, it's the date of account opening, not receipt of funds that counts:

Interest rates for customers who opened an e-ISA account on or before 14 May 2009

Dustykitten

Thanks Badur, I will get them to confirm the rate once the second and third transfers are complete.

barny_100

It would be very hard for them to manage and administer accounts with dual rates surely?

7sefton

yeah, i would have thought they would have just closed the e-ISA and started e-ISA issue 2, a la A&L

digivate

Why are so many people convinced that Natwest will drop their rate? What previous experience do any of you have to back up this suggestion?

The rate of the e-ISA may have been dropped for applications made after the 15th but that is an entirely different matter altogether. Natwest obviously had a target for how much new money they wanted to bring in by offering a leading rate, and having met that target they've dropped the rate ... that in itself is farily standard practice.

The e-ISA is variable rate, but couldn't that just mean that it will change in line with BoE base rate? As the base rate is predicted to stay at 0.5% until next year I don't see why the e-ISA rate should change, and even if base rate does change it will surely go up so the e-ISA rate may even improve. For a variable rate account to change the bank needs to have some justification for the change. Without changes to the base rate there would be no justification, and too much time has passed for Natwest to claim that any falls could be related to previous drops in the base rate.

I've seen lots of people keep predicting that Natwest will drop their rates, but without any information to base this info on I just don't see the point in these comments. If you prove to be correct with your rate drop predictions then you can feel smug about it, but as things stand I'm content to make 3.51% on my ISA while probably you've banked your money on lesser deals.

DX-SFX

Hear hear.

adambro

digivate wrote: »

The rate of the e-ISA may have been dropped for applications made after the 15th but that is an entirely different matter altogether. Natwest obviously had a target for how much new money they wanted to bring in by offering a leading rate, and having met that target they've dropped the rate ... that in itself is farily standard practice.

The e-ISA is variable rate, but couldn't that just mean that it will change in line with BoE base rate? As the base rate is predicted to stay at 0.5% until next year I don't see why the e-ISA rate should change, and even if base rate does change it will surely go up so the e-ISA rate may even improve. For a variable rate account to change the bank needs to have some justification for the change. Without changes to the base rate there would be no justification, and too much time has passed for Natwest to claim that any falls could be related to previous drops in the base rate.

I would agree to a certain extent, NatWest might have been willing to pay a higher interest rate for a limited proportion of their saving accounts and the low chance of base rates reducing any further does make it less likely that the rate will reduce.

I would though question the suggestion that NatWest would really need to justify their decision to anyone if they did. It is simply a variable rate, they aren't committed to tracking the Bank of England's base rate. They could quite easily justify it by saying, for example, they've held the rate up for a good period despite the base rate cuts so benefiting customers but it is no longer sustainable.