Newcastle drop rate again!

arsenalboy

My morning post has just arrived and notification from Newcastle B S that they have dropped the rate again on Big Home Saver from 2.54% to 2% effective 1st May.

Wow, they only just dropped it from 3% to 2.5%. This is getting seriously worrying now with options disappearing fast.

Wish I had taken long term fixes at 3% but they appeared bad at the time.

Archi_Bald

Interesting also that the max from 1 June 2015 in these accounts is now £30,000, whilst previously it was a million (I think).

Gaffy

Got the same letter this morning as well.

bob792

I haven't had a letter yet and hold Issue 1 and Issue 2. So I know how bad the news is are we talking about the rate dropping on Issue 1 or Issue 2 or both from 1st May (the Issue 1 rate only went down to the old Issue 2 rate on 9th March, so I thought I'd be safe there for a few months)?

bristolleedsfan

Yes letters arrived today in respect of both Issue 1 and Issue 2 as per earlier posts :(:(

System

Got my letter today. Pretty poor of them to drop the rate twice in such a short space of time. TBH I knew it was a gimmick to lure people in with a high rate, but as balances increased they probably thought it was no longer good business.

That is the kick I finally needed to open a santander 123, particularly as my wife wont pay tax this year. Her lot can go in there and mine into S&S as the other cash ISA options are derisory.

bob792

teepee83 wrote: »

That is the kick I finally needed to open a santander 123

Snap

I've been researching it this afternoon - they seem to have got over their customer service woes of a few years ago. What had put me off was MSEers saying they would often keep your money overnight for fraud checks when transferring a few £k to own accounts at other banks. Lloyds group have never done that to me. Still, I've put up with overnight delays with Regular Savers so it looks to be worth it for 3% on up to £20k. At least they can't drop the interest rate without the name of their account looking a bit silly.

Archi_Bald

bob792 wrote: »

At least they can't drop the interest rate without the name of their account looking a bit silly.

They can drop the rate as it is a variable rate.

They can also drop the max amount on which they pay interest.

Thrugelmir

teepee83 wrote: »

Got my letter today. Pretty poor of them to drop the rate twice in such a short space of time. TBH I knew it was a gimmick to lure people in with a high rate, but as balances increased they probably thought it was no longer good business.

Lenders aren't going to pay over the odds to raise retail deposits. Remember to pay you interest. They need to lend the money out for mortgages. So it's a little more complex that it may first appear.

System

Thrugelmir wrote: »

Lenders aren't going to pay over the odds to raise retail deposits. Remember to pay you interest. They need to lend the money out for mortgages. So it's a little more complex that it may first appear.

Indeed yes I agree and mortgage rates are very low. It is just a frustrating environment for all of us savers, unless you are brave enough to stick everything in S&S.

I think in the case of Newcastle, if they had dropped the rate from 3 to 2% I would have said fair enough, but to get a letter in early Feb with a rate drop and then 4th April with another isn't great.

Still I realise as cash ISAs go it isn't bad, but think the hassle of 3%+ in current accs is now worth it.

gadgetmind

teepee83 wrote: »

Indeed yes I agree and mortgage rates are very low.

We're looking at borrowing to help out daughter, and we'll be paying just a shave over 2% on a lifetime tracker. How are banks supposed to pay savers more than this if they can't lend at decent rates?