Regular savers - £3k / £250 ... why?

ajaxgeezer

Hi,

Something has been puzzling me a bit and I'm hoping that someone can tell me the answer.

High interest regular savers always (AFAIK) seem to have a £250 monthly cap. Why this figure, and also why is it so standard?

It's just as intriguing that it equals the amount that you can put into a mini cash ISA each year - £3,000. Is this just coincidence?

thanks,
Martin

Secret_Wookie

Because they are loss leaders, banks lose money on each one they
sell and limit the loss by capping the payments at £250pm.

ajaxgeezer

Sure, but why all use the same £250 pcm figure, and is it purely coincidental that 12 of those equates to £3k, a familiar number in itself?

thumshie

purely coincidental- IMHO. YBS alow £500 a month anyway, so it's not all
And next financial year, Cash isa maximums go up, if the regular savers go up too, then you can say it's linked....

exel1966

I believe it's purely coincidental as otherwise the banks would be paying out a significant amount of interest each year. Banks/building Societies tend to follow one another to keep their own accounts alive, otherwise they get left behind.
We are now seeing more 2 year accounts as well, and I'd expect to see even more in the future and possibly raise the £3k amount. It just takes one or two to do it.
A good exception to this is the Yorkshire B/S which permits up to £500pm variable making it a very good buy!
Also by attracting customers to these accounts the banks hope to sell more of their other products to the customer, therefore limiting their loss on the regular saver.

Secret_Wookie

ajaxgeezer wrote: »

Sure, but why all use the same £250 pcm figure, and is it purely coincidental that 12 of those equates to £3k, a familiar number in itself?

Because all the banks copy each other - simple as

steady__eddie

Principality do a £500/month maximum.
Stroud & Swindon used to do a £1000/month maximum (those were the days).

bristolleedsfan

steady__eddie wrote: »

Principality do a £500/month maximum.
Stroud & Swindon used to do a £1000/month maximum (those were the days).

principality do 1000.00 max a month on there variable rate ongoing monthly saver sadly it only pays 5.95% gross

monmouth do 1000 max a month 6.25 gross variable ( 1 withdrawal a year allowed same as principality and most other variable rate monthly savers although some do allow 2 withdrawals without losing the bonus)

Mikeyorks

.... and Coventry do £2000pcm - provided you're over 60. They don't call it a Regular Saver, but it fulfils all the essential criteria.

xmrb2006x

Do banks really lose money on each a/c they sell?? I'm not so sure when you remember that the customer only gets HALF the advertised rate! When you consider you have to sometimes pay salary into current a/c, then the bank is not doing so bad. And even if you consider the drip-feed method, then the bank still doesn't pay that extra interest because that comes from the originating bank! So I think banks actually do alright out of them. I just wish more would do the 12% ones!!! Or 15%!?! C'mon you stingebags!

aleph_0

xmrb2006x wrote: »

Do banks really lose money on each a/c they sell?? I'm not so sure when you remember that the customer only gets HALF the advertised rate! When you consider you have to sometimes pay salary into current a/c, then the bank is not doing so bad. And even if you consider the drip-feed method, then the bank still doesn't pay that extra interest because that comes from the originating bank! So I think banks actually do alright out of them. I just wish more would do the 12% ones!!! Or 15%!?! C'mon you stingebags!

But they don't have your money when it is with the other bank. For all the time they have your money, they are giving the high rate on it, paying a higher rate than what they can actually make from it (knowing that they may only have the money for a year), and hence they will make a loss. The fact that (for the year limited accounts) they don't have much of the money for very long, means that they don't make that much of a loss, and I'm sure they hope to recoup that money from the accounts that carry on with the money left in at a lower rate of interest after the year.