Natwest eISA rate reduction

wellthen

I have had an eISA from Natwest for a couple of years and in February had a letter saying that the interest rate would remain at 3.25% for balances over £30K.

Great, I thought and put this years allowance in the ISA. I then get a letter this morning saying that the rate is going down to 3.01%, while still not a bad rate, smacks a bit of sharp practice to me.

lisyloo

Why is it "sharp practice".
They are very clearly explaining their decisions to you.

I can understadn you don't like the rates, but what is "sharp practice" about it?
They are not deceeiving you or being unclear?

If you don't like it then transfer somewhere else.

wellthen

Maybe 'sharp practice' was a bit too strong but below is an extract from the letter I received in February, encouraging me to get my money in as soon as possible in the new tax year, which I duly did. They did also include a form to facilitate payment on 6th April.

I am fully aware that I can take my business elsewhere, but having only received the rate reduction letter today I feel a tad miffed.

Extract from letter
......
As you've already made full use of your tax-free cash ISA allowance for the 2011/2012 tax year, why not organise your cash ISA contributions for the new year which begins 6 April 2012?

The earlier in the new tax year you contribute to your cash ISA, the more tax-free interest you will earn. You can pay in a lump sum or set up a standing order to make regular payments.

.....
You'll find our latest rates for your cash ISA on the back of this letter.

topgearfan08

Im miffed too, this would have been my first month getting the 3.26 rate up from 3 as this years allowance put me in that bracket, now its dropped

Gonna transfer that ISA outta there, and probably close the current account too. Consulting martins guide now...

badger09

topgearfan08 wrote: »

Im miffed too, this would have been my first month getting the 3.26 rate up from 3 as this years allowance put me in that bracket, now its dropped

Gonna transfer that ISA outta there, and probably close the current account too. Consulting martins guide now...

Good idea to vote with your feet (or rather, your ISA:p)

Have a look at the first page of this thread - probably more up to date than the main site

https://forums.moneysavingexpert.com/discussion/401374

Also - have you thought about achieving a better rate than the 1.1% (before tax if you held same amount in a normal savings account) that you are currently getting from your Premium Bonds

AnythingButChardonnay

I'm in the same boat at the OP, receiving this letter today having just plonked in £5,640 which I could've put in a new 'no transfers' account elsewhere if only I'd waited...

I was very happy with my e-ISA, which I opened back in April 2009. For 3 years the rate has been competitive enough for it not to be worth my while switching.

To suddenly decide to lower the rate, even (or perhaps especially) by 0.25% sticks just a bit. In their letter they say "we'll happily let you switch to another ISA with us" - but they only give their best rates to people transferring in other ISAs (exluding from Natwest and RBS!!).

Bar stewards.

I don't think banks realise quite how much this sort of thing gets peoples backs up. But they're all the same...

thenudeone

AnythingButChardonnay wrote: »

but they only give their best rates to people transferring in other ISAs (exluding from Natwest and RBS!!).

You could always transfer it somewhere else then straight back again (if you still want to give them business)

Charles_Ponzi

For me, the thing that sticks in my throat, is the timing. Just 2 weeks after the start of the new ISA year.

As for explaining their rate drop, the letter is just a statement of fact, your rate is dropping end of story. Not much of an explaination there.

Earlier, they had tried to lower the rate saying I had opened it later than their deadline. Thankfully, this was resolved and I guess should be grateful the higher rate has lasted this long.

May well be time to move on.

topgearfan08

badger09 wrote: »

Good idea to vote with your feet (or rather, your ISA:p)

Have a look at the first page of this thread - probably more up to date than the main site

https://forums.moneysavingexpert.com/discussion/401374

Also - have you thought about achieving a better rate than the 1.1% (before tax if you held same amount in a normal savings account) that you are currently getting from your Premium Bonds

Yep, was going to withdraw all last month but then won, so giving 1 more draw!!!!

badger09

topgearfan08 wrote: »

Yep, was going to withdraw all last month but then won, so giving 1 more draw!!!!

I'll keep my fingers crossed for you

cheekydollarJ

I am in the same boat - and this is not really fair treatment of their loyal customers.

If they had announced this before the start of the tax year then it would have been better. Now i have put new money for 2012/13 I cannot open a new ISA and I am limited to a transfer.