Why are ISA rates so low?

LizEstelle

RayWolfe wrote:

It's called a Market.
If Ruffler is so great then all the money in the world will go to them and everyone else will go out of business.
That doesn't happen.
And in instant access savings accounts the Market probably runs from 0.25% to 6.00%. Is that a conspiracy too? How many others approach Ruffler's rates for an identical product? Must my local shop sell milk for the same price as Tesco?
It's funny that people want to make as much profit from their money as possible but financial institutions are conspiring if they do.
This site helps us all to get better deals ... if we chose to use them. I guess by passing on good rate info we are conspiring.
Ray

None of which answers my point.

If Ruffler can do it, where are all the others?

I'm more than happy to accept explanations other than the possibility of a quiet little cartel going on... just TELL me what they are, rather than making with the unnecessary sarcasm.

ManAtHome

Liz, dunno why you think nothing answers your point? It is a market with each business trying to maximise their profits. If a bank can fill its quota of deposits at 4% why would they even consider offering more (I know I wouldn't, and I'm sure you wouldn't either).

Ruffler probably need to offer higher rates as they are relatively unknown. The other banks already have a heap of "intertia accounts" - things would change if all savers were a bit more (pro)active...

LizEstelle

That at least makes some sense.... but, given that these institutions are supposed to be out there hungrily looking for our business, it doesn't go anywhere near far enough to explain the lack of upward movement on savings rates.

Seriously, you think this is all explained away by 'quotas of deposits'..?

RayWolfe

LizEstelle wrote:

Seriously, you think this is all explained away by 'quotas of deposits'..?

Yep.
What would be the point of offering top rate, get in more money than they can use ... and then ...? Ah, I know, go out of business, AND I really am not being sarcastic. I am disagreeing with you. Sorry.
Ray

LizEstelle

Let me get this right... you are proposing that a bank can have - 'enough money'..?

I think I'd better say fairly promptly that the 'disagreement' continues...

RayWolfe

LizEstelle wrote:

Let me get this right... you are proposing that a bank can have - 'enough money'..?

What on earth do you think banks do with the money they get from us? They lend it out. If they can't lend it out at a high interest rate, or at least better than they borrow it for, they have to put it in the money market at, would you belive, money market rates.
3 month money market mid-rates, at the moment are around 5.14%. So why would they take in more than they can use to lend for, say, car purchase when people aren't borrowing for cars at this moment or they have enough money to cover all the loans they can sell?
I honestly think you're being playful or you realy don't know what financial institutions are in business for. Other than, perhaps, to borrow money from you and I at uncompetative rates.
Never mind, let's leave it there and agree to differ. Nice talking to you, cheers
Ray

LizEstelle

How about this for 'playful'..?

The banks and other financial institutions have been slammed time and time again for, in effect, trying to squeeze their customers for every last red cent.

Are you the only person in the country not to have heard the growing clamour of complaint about excess bank charges and other various shady practices designed to extract the absolute maximum shareholder benefit out of their client 'relationship'? I remind you that the regulators themselves have become involved here more than once.

Is it news to you that, over the last couple of years, mortgage 'document release' fees have suddenly (and suspiciously contemporaneously) shot up into the hundreds of pounds - this worthy levy being applied to the herculean, backbreaking task of stuffing title deeds into an envelope and mailing them?

You then expect us all to believe that these upright exemplars of fairness and financial probity have an interest in NOT receiving money from us in particular ways and forms! Er, is it delving into the realms of rocket science to query why, if these people don't really want our money, they actually offer ongoing ISA accounts at all? ... and why they appear to be spending millions on publicity, unsolicited mailshots included, to encourage us to sign up?

Oh indeed, I'll agree with you about them not wanting our money.... but only to the extent, as mentioned before, that they are not interested in receiving it in a way which cuts too deeply into the plush lifestyle which they believe they owe themselves. There is PLENTY of room for upward movement on savings rates - it would be happening if we had a truly competitive market - but it just ain't, which is the reason for posting the thread.

How about leaving it THERE? Nice chatting.

RayWolfe

You are very much welcome to having the last word.
Good luck
Ray

james3333

*** QUIETLY SLOPES OUT OF THE THREAD*****:rolleyes:

jamesd

You can borrow money on a mortgage at below 4.75%. You can lend it to a cash ISA at 5.75%.

0.75% or so gross margin on mortgage lending was in the annual report of one building society I checked.

What is there to complain about when you can borrow money from a bank, lend it to another bank and make a greater profit on the deal than a building society makes on its own mortgage lending?