Nationwide BS New Issues Of Accounts

bowlhead99

Yeah, it sounds from this thread that Nationwide are rubbish and deserve our scorn as the fatcat bankers screw us over time after time.

They are so terrible that one member here now only keeps a token account running to get completely free European and UK multitrip travel insurance for a cost of zero pounds a year ; another member only uses them for the highest current account interest rate in the country without needing direct debits to show any commitment; another is probably enjoying their 1.44% two year tracker mortgage. Curse them greedy directors for attracting new customers ! :rotfl:

It is true though that customer acquisition costs in a low rate environment - of which the above are all examples - is going to impact the overall amounts that they can pay out to longer-standing customers who want to save big chunks of money with them. The origins of 'building societies' lie in old cooperative mutuals where the goal was to pool resources and help everyone to get a house. If they aim to allow customers to borrow at low interest rates for mortgages and other loans, and need to build their resources (for regulatory reasons and further financial strength) by making a 1-2% margin on savings vs loans, they can't also pay monster rates on people's deposits.

There are always moans at the size of management bonuses with any large institution that has a payroll approaching a billion. In the context of a £200bn set of assets, the £1m bonus to the top dog is a twentieth of a hundredth of a percent. If it was an investment fund it would be a very inconsequential management fee. They could probably save some of that by employing some of the forum members here instead, on a lower bonus, but no guarantee the Society would be prosper.

If they offered no bonus at all for reviving the Society's fortunes, that million saved would not do much to change the average interest rate on £150bn of member deposits, IMHO.

2010

alanq wrote: »

15-year Loyalty Saver 1st Issue will be reduced from 1.50% to 1.20% on 1st April bringing the rate into line with Issue 6.

This is really crap news for a so-called "loyalty rate" and that`s for fifteen years loyalty.The directors are greedy ba*stards and all this talk of no shareholders to pay, no just directors.

Vigin are giving 1.21% easy access to anyone.

http://uk.virginmoney.com/savings/find/virgin_easy_access_e_saver_issue_13/overview/

Nationwide has a current givng free insurance but apart from that, I`m off elsewhere.

le_loup

2010 wrote: »

This is really crap news for a so-called "loyalty rate" and that`s for fifteen years loyalty.The directors are greedy ba*stards and all this talk of no shareholders to pay, no just directors.

Did you read the post above yours?

2010

I`m assuming it`s all issues being reduced to 1.20% from 1st April, not just 1st issue.

Have you got a link?

2010

le_loup wrote: »

Did you read the post above yours?

As I pointed out ANYONE can get 1.21% without being a member for 15 years.
What kind of a rate for loyalty is that, compared to the Coventry who give members an easy access loyalty cash ISA paying 2.5%, compared to any other easy access ISA of about half that amount.
That`s what I call a loyalty rate.

le_loup

2010 wrote: »

This is really crap news for a so-called "loyalty rate" and that`s for fifteen years loyalty.The directors are greedy ba*stards and all this talk of no shareholders to pay, no just directors.

I ask again, did you read post #12?
No one said the rates were better or worse than some other rate but it did comment on the sort of emotive outburst you made - before you made it!

2010

le_loup wrote: »

I ask again, did you read post #12?
No one said the rates were better or worse than some other rate but it did comment on the sort of emotive outburst you made - before you made it!

Don`t know about an emotive outburst, just telling it as it is.
Saving rates going DOWN, pay and bonuses going UP.

le_loup

Did you read post #12?


............ it answers your questions.

bowlhead99

2010 wrote: »

compared to the Coventry who give members an easy access loyalty cash ISA paying 2.5%, compared to any other easy access ISA of about half that amount.
That`s what I call a loyalty rate.

Coventry get good press, and win best buy awards for service and decent rates from time to time. They are still paying the 2.5% on the reward ISA but not to the general public. So, while it would have been nice to be on 'their team' or be offered an exclusive account for signing up now and putting my main current account with them, they're not offering me that. And that doesn't endear me to the building society or make me want to sign up with them, because all they would offer me is a 1.4% rate, which I can find elsewhere - either an ISA at a higher rate or a current account at a much higher rate.

So while I hear good things, there's no point me abandoning my other bank(s) or building society(ies) to go and sample the service they have to offer.

Also, someone above mentioned that Nationwide's current account only pays its crazy high interest rate of 5% for the first year and on a limited balance, so is probably a bit of a gimmick. But Coventry only pay their high ISA interest rate on whatever you can fit into an ISA allowance, so they are similarly capped on what it's going to cost them and clearly they don't offer it to everyone, the rate only appears in the 'closed accounts' table.

On the subject of current accounts, I see the Coventry rate on current account balances is about one percent if you deposit minimum £1k a month, and like the Nationwide one it inconveniently drops by four fifths as soon as you've had your first year. I suppose paying zilch on a current account is traditional, but now we're living in an information age and everyone is used to keeping balances on demand in their current accounts and firing money around using mobile phone apps, it doesn't differentiate them in a positive way.

It is horses for courses I suppose. I am sure as an existing customer it is nice to be bribed to stay somewhere with an unsustainably high rate that they can't offer to new customers. As an new customer it is nice to be bribed to stay somewhere with an unsustainably high rate that they can't offer to existing customers.

So, we'll all continue to shop around, but if both building societies are able to make money, good luck to em, there is space in the market for more than one business model.

xylophone

They've got to have some bubbly at the Board Meetings.....:rotfl:

Remember those Nationwide adverts telling us how much better off you were when there were no shareholders.....