How can regular savings accounts offer such good interest rates?

bristolleedsfan

Special_Saver2 wrote: »

Thought I would quickly give a link to bristolleedsfan's answer from another thread.

http://forums.moneysavingexpert.com/showthread.html?p=5808117#post5808117

I imagine that Yorkshire BS and some of the other providers will continue to avoid passing on the full 0.25% interest rate rises in order to help improve their profitability.

i wouldnt be suprised if yorkshire BS add just 0.15% to its reg saver following last base rate increase, if yorkshire BS pass on the full 0.25% then i would see that as a sign that yorkshire BS are serious about keeping its regular saver account as the top paying savings account.

Special_Saver2

Well, Nationwide must be serious about their product - they are guaranteeing their rate will stay in line with base rates until 1st January 2010 (effectively Bank of England base rate + 1% gross pa) and you can get £3,000 every year into their regular saver without a fixed maturity date for the account.

By the way, isn't it funny how a guarantee until 1st January 2010 sounds so much better than a guarantee until 31st December 2009?

To me, the end of 2009 only feels about 2 and a bit years away, whereas 2010 feels really far in the future - it is not until the next decade.

bristolleedsfan

Special_Saver2 wrote: »

Well, Nationwide must be serious about their product - they are guaranteeing their rate will stay in line with base rates until 1st January 2010 (effectively Bank of England base rate + 1% gross pa) and you can get £3,000 every year into their regular saver without a fixed maturity date for the account.

By the way, isn't it funny how a guarantee until 1st January 2010 sounds so much better than a guarantee until 31st December 2009?

To me, the end of 2009 only feels about 2 and a bit years away, whereas 2010 feels really far in the future - it is not until the next decade.

nationwide started the account with a lower rate than some of the other regular savers, nationwides regular saver is the only or one of very few that operate on tiered rates with a lower rate being paid in any month that a withdrawal of capital is made. ( the more someone saves the more they lose in the month when they make a capital withdrawal.

whats so great about being able to drip feed 250 per month into nationwides reg saver paying 6.5% gross when someone can put their lump sum into a 1 year fixed account paying 6.7% on the whole balance from day 1.

theres nothing unusual or special about base rate + 1% ( with strings)
loughborough BS offered base rate + 2.5% guarantee on its reg saver for 2 years.

a base rate + 1% guarantee is quite common, personally i believe that its sad that nationwide as biggest building society with all the money they spend on continual peak tv advertising werent able to offer base rate + 1% guarantee on all monthly balances increases.

RayWolfe

Yes, that would be nice but who else offers you the opportunity to take out cash whenever you need it as often as you want? Who else has no time or value limit? Who else gives you access by transfer or cash machine? Who else enables you to put money in via transfer, cheque or even cash and again as often as you want?
Cor blimey I sound like a NW salesman! Maybe I'm biased because I have a NW current account and I get instant debit/credit. ;-)

dwsjarcmcd

Regular saving accounts are there to do a couple of things
1. Get PR for the bank or building society and
2. Get you as a customer so you can be cross sold to.

bristolleedsfan

RayWolfe wrote: »

Yes, that would be nice but who else offers you the opportunity to take out cash whenever you need it as often as you want? Who else has no time or value limit? Who else gives you access by transfer or cash machine? Who else enables you to put money in via transfer, cheque or even cash and again as often as you want?
Cor blimey I sound like a NW salesman! Maybe I'm biased because I have a NW current account and I get instant debit/credit. ;-)

reason nationwide are giving so many opportunities to withdraw funds from the regular saver is they are hoping people will only qualify for the lower rates, when nationwide devised the terms and conditions it didnt envisage that people would effectively withdraw/pay in the same money through out a month + put in net 200-250 per month, if someone withdraws 51.00 + in a month and pays in 250.00 per month as an example they get a lower rate of interest for that month.

i got a nationwide current account as well :beer:

Thomas_Crown

bristolleedsfan wrote: »

whats so great about being able to drip feed 250 per month into nationwides reg saver paying 6.5% gross when someone can put their lump sum into a 1 year fixed account paying 6.7% on the whole balance from day 1.

''6.7% on the whole balance from day one''???

Leeds BS only offer 6.7% on 2 or 3 year fixed rate bonds. Who is offering 6.7% on a 1 year fixed account?

bristolleedsfan

Thomas_Crown wrote: »

''6.7% on the whole balance from day one''???

Leeds BS only offer 6.7% on 2 or 3 year fixed rate bonds. Who is offering 6.7% on a 1 year fixed account?

http://www.moneyfacts.co.uk/savings/bestbuys/fixed-rate-savings-accounts.aspx

around 4th working day same as cheques/bacs transfers paid into most accounts :rotfl:

bmw accounts are managed by newcastle building society.

Thomas_Crown

Thanks for that link, bristolleedsfan.

I already have dealings with Newcastle BS because they swallowed up the excellent Universal BS.

ic

Alliance & Leicester's 15% regular saver is probably the best example of a loss leader yet! Saving the maximum allowed of £250 a month over the course of a year means you'd earn £215 of interest. Of course in the mean time they lock you into a mortgage where you'll wind up paying a lot more than that in arrangement, application and exit fees, plus their mortgage doesn't offer the best available rate - so that'll cost more too!