Where have the Regular Savers gone

arsenalboy

What are peoples thoughts on why there have been no new regular savers for a few months now?
I wont look at anything below 4.5% as you might as well take a 2 year fix beneath that level.
I thought banks and societies were after our money?

EarthBoy

Perhaps there haven't been any because most bank's can't afford to offer the interest rate you are demanding?

There are plenty of other Regular Savers around, but most of them are very low interest.

arsenalboy

but the interest rates of 4.5% are less than what banks are paying on the wholesale market to borow.
Base rate has been .5% for a long time and during that time there have been 5 and 6% reg savers.

jimbow25

I think it's a valid question - even though base rates have fallen there seems to be less competition amongst the accounts than there was a year or two ago.

This time last year I think there'd have been at least a dozen 1 year+ accounts qualifying for Special Saver's thread (i.e. being a better rate than a certain number of instant access accounts), and some were a lot better than instant access rates available too.

Now rates have fallen across the board, of course, but there seems to be less interest form the providers.

The only thing I can think is that banks are tightening their belts and trying to maximise their intakes of money for the least amount of admin. A £250 a month monthly saver is relatively high admin for a maximum cash intake of £3,000, whereas a fixed term account could take tens of thousands of pounds from the same customer for less admin time.

Maybe they're just a bit of a fad and banks aren't getting the cross-promotion to other products they have hoped for by offering a loss leading rate?

I doubt they make any money form regular savers to anyone who post on here, anyway! Give someone 6% for a year and they move the money away from the bank the same day/week as the account matures, also refusing to buy any other products from the bank...

agsnu

jimbow25 wrote: »

The only thing I can think is that banks are tightening their belts and trying to maximise their intakes of money for the least amount of admin. A £250 a month monthly saver is relatively high admin for a maximum cash intake of £3,000, whereas a fixed term account could take tens of thousands of pounds from the same customer for less admin time.

The reason there are limits on the intake of money on regular savers is because the interest rates are uneconomic. The accounts are loss leaders. Banks deliberately limit the amount of money they take in.

agsnu

arsenalboy wrote: »

but the interest rates of 4.5% are less than what banks are paying on the wholesale market to borow.

What? LIBOR is at like 1-2%.

RayWolfe

jimbow25 wrote: »

Maybe they're just a bit of a fad and banks aren't getting the cross-promotion to other products they have hoped for by offering a loss leading rate?

Very much a fad. They were very popular 8/9 years ago, fell out of favour until around 4 years ago, peaked two years ago and have dropped off again recently. Same happens for other "unusual" savings vehicles and investment funds; someone starts, the rest follow; someone stops, the rest follows.
That's why we pay these people such large amounts; to be innovative! :rolleyes: