A&L Online saver - another rate reduction!

Heinz

Despite there not having been a change in the Bank of England base rate (it's currently 4.5%), Alliance & Leicester have AGAIN reduced the interest rate on their Online Saver A/C.

This time, it's from 4.5% gross to 4.4% for balances of less than £30k (as, always, with a corresponding reduction in the rate for balances of £30k to £50k).

Their recent reductions have been:

From 5.35% [4.28% nett] to 5.00% [4.00% nett] on 13/6/05

From 5.00% [4.00% nett] to 4.75% [3.80% nett] on 2/9/05

From 4.75% [3.8% nett] to 4.5% [3.60% nett] on 9/1/06 and now

4.5% [3.60% nett] to 4.4% [3.52% nett] on 2/8/06.

I think it's time to move some more money to ICICI !

masonic

This only applies to the old Online Saver Issue 1 accounts opened before 11/07/05 (starting 176). The rate for investments of £30k+ has also gone down to 4.65%.

Heinz

masonic wrote:

This only applies to the old Online Saver Issue 1 accounts opened before 11/07/05 (starting 176). The rate for investments of £30k+ has also gone down to 4.65%.

True but, now that the BofE rate has risen by 0.25%, what's the betting A&L will announce, triumphantly, that they are going to raise the rate for this account by the full 0.25% (and conveniently forget to mention that the rise is effectively only 0.15% because they'd cut it by 0.1% the day before)?

Stonk

Beginning 1 January 2007, subscribers to the Banking Code will have to notify savers if their interest rates have decreased relative to the BoE base rate. Previously, the base rate could increase but your interest rate stay the same, or increase by less than the full amount, and they wouldn't have had to tell you.

http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=140&a=7398

Hopefully this will tend to reduce the somewhat sharp practice of not passing on full increases. Banks will be slightly ashamed to write to all their savers saying "the base rate went up 0.25%, but we're only giving you 0.15%". Maybe it will be only "slightly", but even that is better than the situation at the moment, where they don't say a word and rely on us to notice!

stphnstevey

Does the monthly saver stay the same?

masonic

Heinz wrote:

True but, now that the BofE rate has risen by 0.25%, what's the betting A&L will announce, triumphantly, that they are going to raise the rate for this account by the full 0.25% (and conveniently forget to mention that the rise is effectively only 0.15% because they'd cut it by 0.1% the day before)?

I will be shocked and amazed if they put the rate up at all.

masonic

stphnstevey wrote:

Does the monthly saver stay the same?

The latest open issue and closed issue savings account rates are listed on the website.

MarkyMarkD

Stonk wrote:

Beginning 1 January 2007, subscribers to the Banking Code will have to notify savers if their interest rates have decreased relative to the BoE base rate. Previously, the base rate could increase but your interest rate stay the same, or increase by less than the full amount, and they wouldn't have had to tell you.

http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=140&a=7398

Hopefully this will tend to reduce the somewhat sharp practice of not passing on full increases. Banks will be slightly ashamed to write to all their savers saying "the base rate went up 0.25%, but we're only giving you 0.15%". Maybe it will be only "slightly", but even that is better than the situation at the moment, where they don't say a word and rely on us to notice!

You haven't read the new requirements properly.

They are only required to notify you of changes which are more than 0.25% worse than the BoE rate change - e.g.

BoE up 0.25%, bank rate doesn't change - no notification as only 0.25% worse.
BoE stays same, bank rate falls by 0.25% - no notification as only 0.25% worse.
BoE down 0.25%, bank rate falls by 0.50% - no notification as only 0.25% worse.

tonyg_2

I think it is totally disgusting that A&L reduce the rate on the same day that the BoE increase their rate.

**** Totally shameful ****

I am going to write to them to ask them to justify it. I will almost certtainly be walking with my money next week unless they not only increase the rate but also give a reasonable explanation.


**** Totally shameful ****

Paul_Varjak

I took out all of my money from A&L months ago!

babe_ruth_3

tonyg wrote:

I am going to write to them to ask them to justify it. I will almost certtainly be walking with my money next week unless they not only increase the rate but also give a reasonable explanation.

Don't expect a reply :rolleyes: