variable accounts need some advice

happyhero

Hi I opened the Santander eSaver 5 in August at 3.2% interest rate and from checking it appears it has dropped four times since then and is currently at 1.5%, correct me if I am wrong.

I wanted easy access and was with them the year before with the eSaver 4 which seemed to stay fairly close to my original rate of 3.1%, judging by the interest.

But I am now thinking to move out of the eSaver account as I can do better than 1.5% and it is proving torture as I try to find an account that does not restrict or have the word variable in the rate, bonus or otherwise. It seems to me that they can do what they like once they put in the rate variable.

My questions

Why dont they drop their rate to silly amounts I mean they could have dropped me to 0.5% or worse the day after I opened the account?

Why are they not controlled by some organisation to stop them dropping their rates at will without telling anyone it seems to me this should be controlled?

The rate drops seem hidden so how can I find out when they drop short of contacting them every day.

It seems to me they have got into a naughty practice that should not really be allowed, can't the government step in to control this or something, the word variable seems to let them do what they like.

CLAPTON

accounts with 'variable' interest rates tend to be 'flexible' and easy access

accounts with fixed interest rates tend to have restrictions.


if the government stepped in and controlled rates they would all be about 1% so be careful what you wish for.

opinions4u

happyhero wrote: »

Hi I opened the Santander eSaver 5 in August at 3.2% interest rate and from checking it appears it has dropped four times since then and is currently at 1.5%, correct me if I am wrong.

Your account is probably still paying you 3.2%. It's the new customers who get the lower rate.

Why dont they drop their rate to silly amounts I mean they could have dropped me to 0.5% or worse the day after I opened the account?

Savers fund a bank's lending activity. Pay low rates and people go elsewhere. Then the bank can become insolvent if their assets and liabilities don't balance.

Why are they not controlled by some organisation to stop them dropping their rates at will without telling anyone it seems to me this should be controlled?

If you read the terms and conditions of your account you will see a commitment from them to give you two months notice of any rate reduction. In writing.

It seems to me they have got into a naughty practice that should not really be allowed, can't the government step in to control this or something, the word variable seems to let them do what they like.

Payment Services Regulations protect you and give you what you want. Santander comply.

You've just misunderstood how it (doesn't) affect your account.

fiesta04

You are still getting 3.2% And will do for 12 months from when the account was opened. It is all on Santander website under Interest Rates.

F4

happyhero

Thank you guys, very glad to hear I understood it wrong. I have already emailed them asking them my rate so hopefully they will confirm the rate is still 3.2% in a few days when they reply.

But one more question if that's ok if you say they have to give me notice of rate changes 2 months before, are they able to do that within my 12 month offer period, or is this 2 months business meant to be taken as applicable after the offer period?

Basically I am asking is it most likely that I will keep the rate I get when I apply even on a variable rate/bonus account, or is it in fact definite that I will keep the rate given on application and if so doesn't that make it a fixed rate account, confused on this bit?

Hope I am making sense.

Sorry one further question, why did I read on the net the rate was 1.5% on the eSaver 5 account when it is not even available any more or should I take that to mean that is what it got down to just before that account was taken off the market?

opinions4u

you say they have to give me notice of rate changes 2 months before, are they able to do that within my 12 month offer period

Yes.

You have two elements to your rate. Underlying, which they can vary, and bonus. Most providers offer "fixed" bonus which cannot be varied. A few offer variable bonus - which can be aired.

or is this 2 months business meant to be taken as applicable after the offer period?

They could reasonably argue that they've given you 12 months notice of bonus expiry. No idea if they will write to you or not - they have already told you. Make a diary note!

fiesta04

You must have miread it as 1.5% is the latest eSaver 9/10 { I believe }. Go to Discontinued Accounts and you'll find the rates for eSavers 8,7,6,5 etc.

You will not be reminded when rate goes down, but it is for 12 months from date opened.

F4

innovate

fiesta04 wrote: »

Go to Discontinued Accounts and you'll find the rates for eSavers 8,7,6,5 etc.

The URL is: http://www.santander.co.uk/csgs/StaticBS?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1223426989143&cachecontrol=immediate&ssbinary=true&maxage=3600

innovate

happyhero wrote: »

..... why did I read on the net the rate was 1.5% on the eSaver 5 account when it is not even available any more or should I take that to mean that is what it got down to just before that account was taken off the market?

Where on the next did your read that? I can't see or remember anything that suggests Santander ever had 1.5% (AER, base rate, bonus rate, gross rate or net rate) on the esaver 5.

The esaver issue 9 is 1.5% AER, and is the currently available offer for new accounts.

happyhero

innovate wrote: »

Where on the next did your read that? I can't see or remember anything that suggests Santander ever had 1.5% (AER, base rate, bonus rate, gross rate or net rate) on the esaver 5.

The esaver issue 9 is 1.5% AER, and is the currently available offer for new accounts.

Ok I have remembered where I saw it now apologies it was not on the net but in the Daily Mail money section, I have it here now and in it it says savers were offered 3.2% in June (which is when eSaver 5 was out) and that there have been 4 drops in this rate so that it is 1.5% now but it does not not actually say the eSaver 5 has dropped 4 times so I suppose it is up for interpretation. I don't know if there is a way you can see a article from an old Daily Mail but it was on page 45 of November 7th paper.

pqrdef

Somebody has already posted a link to the article on a different thread.

But in recent years I don't think we've seen anybody reduce the rate on an existing instant-access account within 12 months of opening.