NOW CLOSED Newcastle 3 year bond, 4% with 90 days notice to withdraw

Rollinghome

I sometimes wonder how advantageous to savers all the publicity for new accounts by newspapers and sites like this really is?

When banks and building societies offer new accounts there's always a limit on how much money they want to raise with that account. So that when the account gets big publicity from a site like this more savers may hear about it more quickly but ultimately the number of accounts that can actually be opened will be unchanged. It just means the issue is closed more quickly.

A case in point would be the BM account which paid a good 5 year rate but also allowed withdrawals with 90 days loss of interest. This site then sent out an email that encouraged everyone to use the account not as it was intended but for shorter term savings. The unintended result for BM was that they had a lot of people opening accounts who didn't intend to keep money with them for the full five years and which could affect their funding plans. The result for savers was that BM promptly withdrew the account and new accounts since have had less generous terms for early withdrawal.

Can be still more of a problem for small building societies. If they make the mistake of being over generous they can be overwhelmed by applications causing havoc for their administration and bad service for their customers.

I wonder if the result is going to be new accounts coming and going even more quickly than now and banks being more careful not to be too generous to avoid giving themselves huge administrative problems from a rush of applicants? Will there be a general levelling down? Could savers lose more than they gain?

Reaper

Rollinghome, I think you are right. However I can't see what we can do differently. When people ask what account would be the best for their savings for a year I really don't feel that we can pretend it doesn't exist and tell them to go for a lesser paying account.

Indeed one of the purposes of this site is to wring the best possible deal out of banks for consumers.

It may have the unfortunate effect of reducing the generous terms on offer but that does not mean we would be justified in keeping it to ourselves.

Rollinghome

Reaper wrote: »

However I can't see what we can do differently.

Absolutely and I doubt that individuals have much effect. The newspapers and sites like this want headlines to maximise their readership and traffic to generate their profits. They aren't charities.

I do however question the long term effects of sites like this publicising 'wizard wheezes' like 'stoozing' credit cards and exploiting more flexible terms in fixed rate savings will have for the consumer? My suspicion is that we could be the losers.

avalanche_3

The purpose of this site is to help people get the best deals.

This account is still being missed because it is not advertised in Martins best savings list.

It tops all the accounts on Martins list which are fixed for 12 months or less and because of the Newcastles terms and conditions this can be used as a 90 day notice account.

To answer Rollinghome, I for one have been getting the best savings rates and making thousands out of stoozing over the years thanks in part to this site.

The Banks close the loophole or change the conditions when they have the money or the customer numbers they require.

Rollinghome

Avalanche, the assumption seems to be that more people will be able invest in an account because it's on Martin's list. If you think about it for a second that's very unlikely to be the case.

The bank or BS will have a specific funding requirement to be filled within a certain timeframe. Once they've met that requirement they close the issue or reduce the rate.

To reach their target they have to offer an attractive rate or they can opt for a less attractive rate and spend more on advertising the offer. That's why many pay for links on sites like this. Advertising and publicity helps them obtain their funding requirements without paying a higher rate than necessary. If they couldn't reach their target they'd have to improve the interest rate or terms of the offer.

So the unintended consequences of publicity from sites like these may be to help individuals but be negative for savers overall.

avalanche_3

Without sites like this most people would miss the best rates because these sometimes come from Banks or Building Societies which are in a different area of the country to where they live and some small Building Societies like the Newcastle don't do a lot of National advertising.

When the national press publish details of good rates in their savings articles the rates tends to be out of date or the offer as finished.

On this site if a good rate is found by a money saver like myself then why not tell other like minded people about it.

avalanche_3

This bond is still available, so get in quick and you will have a 90 day notice account paying 4%.:T

Reaper

I see MSE have now included it in their Top Savings Accounts.

evenasus

avalanche wrote: »

This bond is still available, so get in quick and you will have a 90 day notice account paying 4%.:T

I'm trying! Well, have opened it with just £1K - but having to transfer money from other accounts to the nominated account then to Newcastle is a 6 day performance.

Anyone know if Newcastle accept debit card payments? Into a bond that is.

Update.....Just phoned them and afraid not.

Rollinghome

avalanche wrote: »

Without sites like this most people would miss the best rates...

You still seem to be missing the point.

The banks and BSs need a specific amount of funding within a certain period. Once they have that funding or if it comes in faster than anticipated they either end the issue or reduce the rate. They won't take more money than they need just because more people apply or withdraw it before they have the necessary funding as you seem to assume. If the funding doesn't come in as fast as they need they increase the rate; if it comes in too fast they cut the rate.

More publicity doesn't mean they will accept more money or there will be more accounts.

The banks and building societies benefit from publicity because it enables them to get their required funding at a lower rate than otherwise. Why else would they pay for advertising?