Nationwide BS New Issues Of Accounts

apt

The Flex Plus is a good option for some, but if you've got a newish car, don't travel outside Europe and have a cheap phone it is worth next to nothing. Nationwide has given most of its savers (who are the large majority of its members) a poor deal since the economic crash. That isn't because of a funding model, but because of unforeseen circumstances that have left a lot of its borrowers on standard rate mortgages that can't be raised more than 2% above base rate.

le_loup

I think 2010 just wants a pop at Nationwide. Any attempt to discuss with him appear to be a waste of time.

xylophone

I have been a Nationwide customer for rather more than 15 years and have used the Flexdirect and had other accounts over the years that paid reasonable rates.

But currently the offerings for savers are poor - and the notion of 1.2% for loyalty frankly insulting.

alanq

2010 wrote: »

I`m assuming it`s all issues being reduced to 1.20% from 1st April, not just 1st issue.
Have you got a link?

No I got my information in a letter today which only referred to the account relevant to me.

ColdIron

I've got over 22K in their regular saver so am sad to see the rate drop to 2% but I'll keep going as it's still better than the alternatives (maxed out on all the other usual current account suspects etc). I like their Select credit card though, cashback on all purchases and no loading or commission on foreign currency purchases. I'm in Thailand right now and the exchange rate I'm getting is better even than cash. My FlexDirect days are well and truly over but I keep it open to maintain a main banking relationship with them (the £1,000 for the regular saver covers this) to take advantage of any future offerings. All in all I'm pretty positive about nationwide

bowlhead99

xylophone wrote: »

I have been a Nationwide customer for rather more than 15 years and have used the Flexdirect and had other accounts over the years that paid reasonable rates.

But currently the offerings for savers are poor - and the notion of 1.2% for loyalty frankly insulting.

I think the 2% on Save to Buy is a decent product compared to rivals, as is the 2% regular saver on a decent £1k a month. Anyone actually in the process of saving, rather than already saved a big stash, would find these products useful, once they've moved past the lucrative flexdirect and if they are fed up of tarting themselves out to all the top current accounts.

For people with bigger balances, I can't argue the contention that the offering is poor - they only pay 0.9% if you have a flex current account, have a year's loyalty, or accept limited access; if you don't meet those criteria, you'll get even less. That's not a best-buy award winning rate. Still, if their benchmark is that lowly 0.9%, I don't think it's "frankly insulting" to offer an interest rate that's 33% better than this, to recognise your 15 year loyalty.

If you have five years with them your interest rate is one and one ninth times the amount that newer customers get. If you have ten years, it's one and two ninths the newer customer rate. If you have fifteen or more years with them, even if you only had a pound in the account, they will thank you by paying you one and a third times the standard rate.

So, you're right that the offering for certain types of savers is poor and the absolute amount you're getting is not as good as the 'best buy' that you could find elsewhere - but a lot of other big high street brands will give you worse rates, and the concept of giving a premium for a longer relationship is better than a kick in the teeth. Even with long service - should you really expect 1.5%+ on your 50k in a low interest rate environment where the 50k is lent out on a mortgage deal for the next two years at 2% or less?

2010

le_loup wrote: »

I think 2010 just wants a pop at Nationwide. Any attempt to discuss with him appear to be a waste of time.

Incorrect again.

If NW had better rates for lump sums over the last ten years my money would have been with them.

What annoys customers is the way NW want to be "on your side" and have "no shareholders to pay" but pay rock bottom saving rates.
Their rates can be beaten all the time and some of their savings accounts can only be opened if you have a current account.
Whether it`s NW or not, if there`s a better rate for a lump sum, I`ll move.

Profits double to one BILLION in NINE months and what do they do --- cut saving rates.
Yes, they`re really "on your side".

http://www.thisismoney.co.uk/money/saving/article-2952232/Nationwide-BS-increases-profits-nearly-1bn-nine-months.html

'As a mutual, we are firmly committed to meeting the needs of our members and our performance is testament to this.'
Last year, Mr Beale received a bonus of £1.3million.

le_loup

You still haven't read bowlhead's post #12 or, even his post #37, have you?
Perhaps you have and just don't understand it!

bowlhead99

2010 wrote: »

What annoys customers is the way NW want to be "on your side" and have "no shareholders to pay" but pay rock bottom saving rates.

Low rates for certain types of savers yes. As mentioned above, plenty of other decent products for other customers, including borrowers of mortgages and personal loans. Savers with large balances everywhere are generally out of favour because banks and BSs if they have healthy balance sheets and do a lot of lending can get government incentives and a plethora of cheap finance from elsewhere. If you go to a much smaller savings organisation that does not have access to these pools of capital, you will probably find them more hungry for your cash.

Their rates can be beaten all the time and some of their savings accounts can only be opened if you have a current account.

So, making you 'qualify' for a good rate by using their other services rather than being a nobody off the street is a bad thing now? I thought people were bemoaning the fact that there was no reward for loyalty? And here they are offering (fl)exclusive accounts for their customers and you think it's a con.

Whether it`s NW or not, if there`s a better rate for a lump sum, I`ll move.

Isn't that the problem with human nature? From your side, if someone will give you a better rate you will jump ship immediately. Now, from their side, if there was a better rate to provide them with capital, they should move, right? So they cease to offer you 3% because some other depositor will offer them 1.2% or the government will offer them 1.2% or the bank down the street will offer them 1.2%. If they are trying to stay in business - and grow their financial strength to benefit their customers in the long term because as you say, they don't have shareholders - then what would you think they should do?

Profits double to one BILLION in NINE months and what do they do --- cut saving rates.
Yes, they`re really "on your side".

The amount made is a historic amount.

The fact they made a small amount in the previous year means the profits doubled but does not mean they are higher than the 'right' amount for the organisation's size and financial condition.

Also, just because they made an amount in the past does not mean they wouldn't make a loss (or inadequate profit) in the future if they do nothing about their rates vs market conditions.

Do you know what the industry regulator's capital requirements are for an organisation with £150bn of mortgages and loans and £130bn of member deposits? What profit should they have made this year, if not a billion?

Coventry BS announced their results for 2014 this week. They had underlying profits of £217 million. They are much smaller than Nationwide with under £30bn of mortgages instead of £150bn, they spend less than £60m on staff (instead of more than £600m) and so on. Nationwide is much bigger organisation so wouldn't you expect the profits to be five times as high? It is run for its members but is not run to be a zero profit organisation because it has to build its assets to meet regulatory requirements and to grow and deliver future value rather than shrink and die (which has happened to many peers over the years).

Writing out the BILLION in capital letters is just sensationalising the true story. If I invest £100,000 in a corner shop, borrowing money to buying premises and build stock, would it be scandalous to grow the value of the assets over the year by TEN THOUSAND POUNDS? That would be a much greater margin than growing 200billion into 201 billion. But nobody needs a billion, right, so it must be scandalous. They did not pay the billion to the directors. It is sitting in the organisation propping it up.

Last year, Mr Beale received a bonus of £1.3million.

I thought you said they grew the profits by half a billion pounds under his leadership? An incremental cost of a million to achieve that return seems like good value for money, although it wasn't only attributable to him of course.

I suppose they could just gave done without a chief executive and then I guess they could have given you a third of a penny more taxable interest on every thousand pounds deposited and saved me a third of a penny on my thousand pounds of mortgage. That's how far a million goes when spread over £130bn of net deposits and £150m of mortgage book. However, then they wouldn't have had anyone steering the ship, and the billion pound gain might have been ten billion pounds lost. That probably wouldn't be in your best interest, as a 'loyal' customer who wants to see higher rates on your deposits over the long term.

Castle

bowlhead99 wrote: »

Coventry BS announced their results for 2014 this week. They had underlying profits of £217 billion. They are much smaller than Nationwide with under £30bn of mortgages instead of £150m, they spend less than £60m on staff (instead of more than £600m) and so on.

I think you have some of your figures wrong; profits of £217 Billion would be enough to pay for the National Health Service twice!