Notification of interest rate changes from banks

relwofnai

I understand that banks etc have a legal obligation to notify customers of any changes to interest rate changes and accept that they satisfy this obligation. However I feel very strongly that they manner in which they do is unsatisfactory and certainly not customer friendly.

When interest rates change I receive a bog-standard letter with a leaflet detailling the current interest rate changes for every single savings account, including closed accounts. The leaflet usually runs to several pages and both lacks clarity and creates confusion. It also makes it too dificult to determine how much interest you are receiving on your savings.

I feel very strongly that this contributes to savers failing to shop around for the best rates. I am equally certain that banks etc are aware of this and are at best reluctant to do anything to make the information more customer specific and at worst happy to exploit this ploy to deter savers from achieving the best return on their savings.

This came to the fore just before Easter when I was in my local branch of Abbey (now Santander). I had an appointment to see someone about the paltry 0.1% interest Santander were paying on an old ISA, and while I was waiting to be seen I also overheard another couplw who were astounded to discover they had received only 12 pounds on their ISA which held 12 thousand pounds. They left the premises in a state of shock and absolute disbelief.

The same lack of clarity exists on line because you are usually directed to a table which details the current rates on all savings accounts, including closed accounts.

In the hi-tech 21st century banks should be able to send customer-specific letters which provide clear and concise information on the customers holdings. Similarly banks should be able to provide account-specific information about relevant interest rates for on-line accounts.

This would make the information more accessible, relevant and customer friendly. Also it would encourage savers to achieve the best return on their savings and discourage banks from exploiting the apathy of quite a high proportion of savers (admittedly including myself in this instance) and increase competition between banks.

I wonder if people feel this is worthy of a campaign of some sort, perhaps including a standard letter that subscribers to this website could use to support the campaign

home_alone

Yes its a case of them sending everyone new Terms and Conditions and asking you to pick the bones out of them. I got this from Nat West the other day and am still none the wiser, I called them to get my current rates and they could not get it right. Its the same with the TV ads anyone seen any rates advertised, no.

someone

Or just print the interest rate on the statement & on online banking just show the rate at the top of the page. Its the clearest way to send the information out.

Only issue would be if statements are yearly then you may only find out after the fact. In that case then maybe statements should also carry a forward message about changes a bit like ...
"Interest on this account has been credited at 8%. On April 20th 2010 the Halifax Super Saver variable interest rate will change to 0.00001%"

fairtrade

The banks are not going to make their interest rates clear, else we would all jump ship to get the best rates.

someone

fairtrade wrote: »

The banks are not going to make their interest rates clear, else we would all jump ship to get the best rates.

FSA or the goverment should make them do it

theGrinch

if you have a 30, 60, 90, 120 or 180-day notice account then banks should give you identical notice of any change to interest rates. not sure they have to at present. fair is fair.

withnell

Then again, getting sent all the rates they offer gives you an idea of what you could be getting if your rate is lower than the top rate? I agree the T&C change leaflets are horrible, but is a couple of page table of interest rates really a trial?

PC_Gabriel_Kent

They want spoon feeding

sheslookinhot

Some people want to take no responsibility for their affairs.

The banks are businesses, or do some not yet realise this. They have shareholders and so are charged to maximise their profits.

Remember, you all have an option.

fairtrade

someone wrote: »

FSA or the goverment should make them do it

If there were enforcement policies for the reporting of interest rates, these would cost the Banks money and they would pass this cost on by offering poorer interest rates.
:mad: The main thing to keep in mind is that it is your money and it is up to you to manage it. :think:
You should also read thoroughly the T&Cs of any account you hold as these will state where your provider will display their current rates of interest. You can also obtain rates on-line.

rb10

fairtrade wrote: »

If there were enforcement policies for the reporting of interest rates, these would cost the Banks money and they would pass this cost on by offering poorer interest rates.

Until Lloyds stepped in, Halifax always used to offer good rates, and give them to you on every online banking screen (for the vast majority of accounts).