Stop! Isa thieves campaign

bagsacash

Why on earth would the customer think that? If they are too lazy / naive to check their interest rates from time to time (especially once a fixed rate deal has expired) then they get what they deserve.

Similarly, if you keep an eye on things, move your cash around when a better deal surfaces, you also get what you deserve!

But thats the point isn't it, if you try and move money around you lose interset so it does not pay to move money around because of the lose you make doing so.

Either way you lose money!

john_s_2

bagsacash wrote: »

... if you try and move money around you lose interset so it does not pay to move money around because of the lose you make doing so.

Either way you lose money!

Well, that depends on the rate you're moving to. You have to take account of the interest you'll lose while it's in limbo. If it's not worth it then don't move.

It's a bit like knowing that baked beans are 2p cheaper at Tesco while you're shopping in Sainsbury's. Is it worth the time and hassle to drive over there, just to get your beans? If not, then buy them from Sainsbury's.

bagsacash

If you have £40k in an ISA paying 3% you will be robbed of interest at £25 per week while the ISA is in tranfer between banks.

Not to mention the rate at the bank you are transfering to may drop between transfer which means you may need to transfer yet again at a lose of £25 per week.

You either have to be stupid or working for the bank to think the current system is fair to the customer.

john_s_2

bagsacash wrote: »

If you have £40k in an ISA paying 3% you will be robbed of interest at £25 per week while the ISA is in tranfer between banks.

D'oh, didn't mean to thank you! Anyway, I haven't checked your maths but I'm sure you're correct.

Right, you're halfway there. So if you're losing £25 a week while it's transferring, and say it takes five weeks to transfer, you need to be transferring to an account that will make you over £125 compared to leaving it in the old account.

Obviously there's a few variables to worry about: I doubt that 3% will be fixed for example, so you won't know for how long it will stay at 3%.

It's a judgement call and you have to go with what you feel is right.

bagsacash

Lets put it this way if transfers were instant the banks would not be dropping rates like they are doing today.


As it stands things can only get worse for the savings customer because the banks make profit if you move or if you stay. The bigger the ISA the worse it gets for the customer.

glider3560

bagsacash wrote: »

Lets put it this way if transfers were instant the banks would not be dropping rates like they are doing today.


As it stands things can only get worse for the savings customer because the banks make profit if you move or if you stay. The bigger the ISA the worse it gets for the customer.

Perhaps if transfers were instant, ISA rates would generally be lower because they have to pay interest for a longer period?

john_s_2

bagsacash wrote: »

Lets put it this way if transfers were instant the banks would not be dropping rates like they are doing today.

Maybe, maybe not. The hassle involved in transferring your ISA money from one provider to another is definitely an important factor to consider. I'm sure banks factor this in when estimating how many customers they'll lose from any rate drops they make, or gain from new accounts they introduce.

It's a price we have to pay for this tax-free account. Nothing comes without a price.

To force banks to speed up and simplify the transfer process would require new rules (not sure whether that could come from the FSA, or would require legislation from Government). And that could end up have other unforeseen consequences. But I agree it's something that should be looked at by the powers-that-be.

But in the meantime we all operate in the environment we're in. And you can't blame the banks for exploiting any opportunities they see. As others have pointed out, that's their business!

Some of them are particularly good at it (or bad depending on your point of view). I had two fixed rates with Halifax and Skipton, both of which have ended. The Halifax one is now paying 0.1% (and is in the process of being transferred), while the Skipton one is now paying 2% (or similar). I haven't started transferring that one yet as 2%, while not market leading, isn't dreadful.

EDIT: As others have also pointed out, the practice of slashing rates after a headline grabbing rate has expired isn't at all restricted to ISAs. So I'm not sure that faster transfers would have that much effect on ISA rates.

YorkshireBoy

bagsacash wrote: »

If you have £40k in an ISA paying 3% you will be robbed of interest at £25 per week while the ISA is in tranfer between banks.

You keep saying that, but I've never lost more than 2-3 days* worth while the cheque was 'in the post'. Indeed, some providers (Halifax & YBS spring to mind) backdate/used to backdate the deposit (for interest earning purposes) to the day after it left the previous provider.


* NatWest once took 10 days, so I raised a complaint with them. I was told it was because they were inundated with transfers (when they were paying 6.xx/7.xx% a couple of years ago...those were the days!) but they agreed to backdate the deposit/pay me some goodwill...I forget which now. Either way, I didn't lose out excessively.

bagsacash

Perhaps if transfers were instant, ISA rates would generally be lower because they have to pay interest for a longer period?

And so the banks should pay interest on my savings for as long as they hold my cash, I for one am not a charity giving cash to banks for free. If banks want to use my cash then they should bloodly well pay for it.

Some of you people think banks should hold peoples money for nothing or next to nothing while the bank treat us like dirt and expect us to be happy about it.

You keep saying that, but I've never lost more than 2-3 days

But you are not everyone and everyone does not get away with a 2 -3 day lose. And a 3 day lose on £45k at 3% is £10.70, banks would charge a customer £35 pounds if you took only 1 pence from them without authorisation.

bagsacash

Perhaps if transfers were instant, ISA rates would generally be lower because they have to pay interest for a longer period?

And so the banks should pay interest on my savings for as long as they hold my cash, I for one am not a charity giving cash to banks for free. If banks want to use my cash then they should bloodly well pay for it.

Some of you people think banks should hold peoples money for nothing or next to nothing while the bank treat us like dirt and expect us to be happy about it.

You keep saying that, but I've never lost more than 2-3 days

But you are not everyone and everyone does not get away with a 2 -3 day lose. And a 3 day lose on £45k at 3% is £15.00, banks would charge a customer £35 pounds if you took only 1 pence from them without authorisation.



And you can't blame the banks for exploiting any opportunities they see. As others have pointed out, that's their business!

And you cannot blame the customer for wanting the best return on his/her hard earned cash - we are not a charity to the banking business!