thoughts on the new TSB 5% account and effects it could have on p2p lender?

webbhost

Hi all,

So so luck has it, I signed up with ratesetter today - starting off with a small amount of £100 to test it out and get a feeling of how it works without doing anything too mad. with their shorter term interest rates being between 2.2-4%

My luck now, is I just had an e-mail from Moneywise saying that tomorrow - TSB are opening a new current account that offers 5% interest on balances upto £2000 assuming online banking, paperless and no red balances (which won't be a problem for me). - and anyone with more than £2000 can open up a second account.

My initial thoughts are if Lloyds are going to open this up tomorrow at 5% - what do you think P2P lending sites are likely to do, taking into consideration that the rates are set by the public (lenders)?

My assumption is that people will quickly realise they'll get a quicker and better deal with TSB and move over - leaving a majority of people lending for loans asking for much higher prices? Don't see the logic in loaning out at 2.3% monthly access when Lloyds offer the same for 5%!?


Anyone got any thoughts on this - am I correct in what I am saying or is there a issue somewhere that I've not noticed or am not aware of? Are interest rates about to get interesting again?

Thanks for any input people!

Sourced Info from:

http://www.moneywise.co.uk/news/2014-03-12/tsb-launches-current-account-paying-5-interest

Archi_Bald

These sorts of accounts have been around for a few years now, and from what I can tell, they have made no discernable difference to the P2P industry. Although the TSB Plus account will be a nice account, I doubt it will make any material difference, either.

BTW, TSB is not Lloyds. Lloyds will have a similar new account, only 4%. Lots more info about these accounts in other threads.

YorkshireBoy

webbhost wrote: »

I just had an e-mail from Moneywise saying that tomorrow - TSB are opening a new current account that offers 5% interest

I think Moneywise have the launch date wrong. I've just phoned one of the people here and they've confirmed the launch is Sunday online and Monday in branch.

webbhost

well spotted Archi, I was aware that Lloyds are no longer TSB, however old habits and thoughts are hard to rid of! - Whoops!

I know there have been a few fairly decent onces knocking about such as the santander 123 account - however from what I've been able to make out (unless I've been looking in the wrong place) is that these higher interest accounts have pretty much always been hard to get into with the higher rate because for example, they require a minimum monthly deposit of £1000.

In my eyes, this 5% with 500 minimum deposit opens up a good interest rate current account to a much wider spectrum of people as anyone with a full time job, even on minimum wage will now be able to take advantage of it! - which was why I was thinking it may change the rates of P2P saving / lending sites a bit?

I guess at the same time, some people are simply too lazy to switch and make use of a better account so for these people, p2p lending would still be a bonus as it could offer rates than their "current" account (That's assuming they can be bothered to sign up with a p2p site).

Hopefully there are no hidden fee's for having this account - quite looking foward to having a look at it!

Thanks for the correction from MoneyWIse Yorkshire boy, I'll keep my eyes out tomorrow but won't get too disappointed thinking it was a hoax or early april fools joke until after sunday!