Anyone sticking with NatWest e-ISA (acc opened before 14 May 09)

Dustykitten

Mine went Santander to Natwest in less than a week, I was most impressed. The few days 'missing' interest was credited too by the look of things. I've put this year's ISA allowance in as well for now as there doesn't seem much better about.

The_Enforcer

I've had funds in a NW E-ISA since May 2009, I just got my application in before the deadline and was initially earning 3.26% in the second tier, before falling to 3.01% in Dec 2009. In spite of incurring the associated costs of buying a house a year ago, I have just managed to keep this savings pot in the second tier, still earning that rate. However, the next significant outlay on the property is likely to take it below the threshold and so the rate of the remaining funds would fall into the bottom tier of 2.75%.

If/when this occurs, I am minded to transfer to the Halifax Reward ISA (assuming it remains available in the near future). In a separate decision, I'm about to open the Halifax Reward Current Account, to benefit from the £5 a month deal. This would entitle me to the bonus rate of 3.2% on that ISA, so the extra 0.45% would make a switch worthwhile.

edda

For those still in this account, the rates will be lowered from 14th May, as follows:

£30,000 and over 2.97% (3.01% AER)

£10,000 - £29,999 2.72% (2.75% AER)

up to £9,999 2.72% (2.75% AER) - unchanged for this tier

So, time to move on ...

someone

Ha, my transfer completed to Santander yesterday

CPfan

I just received the letter from NatWest this morning about the drop in interest rates. I see the bank has an ISA with similar rates but it's only for new customers. Why do the banks do this? I guess I'll have to transfer my money out of NatWest now.

Charles_Ponzi

Goods question CPfan. Seems to be normal business practice. Some people will just accept the rate drop and some will transfer out. At the same time, NatWest will attract new customers with their higher rate. I guess, doing it this way, must make them more money! The loss of their loyal customers is out-weighed by those staying put and the new customers being added. Plus it keeps all the banks busy doing ISA transfers!

Charles

CPfan

Sorry I didn't reply before Charles, I only just saw your post.
I suppose my question was somewhat rhetorical because I realise the banks are in business to make money for their share holders and to give large handouts to their chief executives, not to reward their loyal customers. However, it seems rather shortsighted to upset existing customers who then take out their money and put in in another bank. Why not retain the old customers and attract new money at the same time? I must be missing something.:think:

meggsy

I didn't know anything about this until just now as I haven't had a letter ...

http://www.thisismoney.co.uk/money/saving/article-2134541/NatWest-RBS-slash-rates-loyal-savers-lock-new-3-5-best-buy-eIsa.html?ito=newsletter

Nice way to treat long term existing customers isn't it ..

CPfan

Thanks for the link to that article meggsy. I hadn't see it before. I think it's disgusting you didn't even get a letter from the bank to notify you of the change in interest rates. You could complain. I don't suppose it would do any good but it might make you feel better!

escapee

I have already subscribed £2k to this year's ISA allowance (Natwest e-ISA) before I received the letter informing of interest rate cuts so there is nothing I can do about this money, but I am in the process of moving all my previous years' allowances to Halifax 3yr Fixed ISA at 4.25%.

Although no one can see in to the future, I can't see any major increase in the UK base rate for at least 3 years, possibly longer so I can only presume variable rate cash ISAs will continue to drop