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Who thinks rates will drop on Santander 123?

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When the Bank of England drops the base rate to ZERO, who thinks the TSB/LLOYDS/TESCO and Santander 123 accounts will drop their 5/4/3% rates?
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  • stringer_bell
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    possibly.. if they did.. I'd be moving my money from there instantly
  • Scarpacci
    Scarpacci Posts: 1,017 Forumite
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    They could do so in the future, but I don't think it would directly be because of the base rate cut. These accounts weren't on offer in the first place because the base rate was 0.5%. They're not magically profitable at that level or then unprofitable with interest rates at 0.

    Yes, there's an effect from the base rate on banks net interest margins, but these accounts were always something of a loss-leader. They want new accounts in the door, new people to whom they can sell other products. That won't change after another base rate cut, even if the level of enticement does.

    These accounts have always been a good deal which has to end at some point. If we're closer to the end now, it's mainly because of how long this game's been played, rather than a rate decision. I mean, would you argue the reverse is true? That a decision to raise interest rates to 1% would mean these high-interest rate accounts are likely to last longer? I wouldn't, if only because recent (well, nearly a decade now) experience of higher interest rates didn't seem to improve current accounts - as I recall savings accounts were the main beneficiary.
    This is everybody's fault but mine.
  • moneyfoolish
    moneyfoolish Posts: 681 Forumite
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    possibly.. if they did.. I'd be moving my money from there instantly
    If that happened, I'd like to move mine but I can't see there being anything to move it into because all the other banks would be doing the same thing and Cash ISAs are a waste of time at the moment!
  • economic
    economic Posts: 3,002 Forumite
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    If that happened, I'd like to move mine but I can't see there being anything to move it into because all the other banks would be doing the same thing and Cash ISAs are a waste of time at the moment!

    put it in stocks
  • bigfreddiel
    bigfreddiel Posts: 4,263 Forumite
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    possibly.. if they did.. I'd be moving my money from there instantly

    Where to? Or to where?
  • ManAtHome
    ManAtHome Posts: 8,512 Forumite
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    Santander Half, One and a Half, Two and a Half doesn't really scan - I suspect they'd drop the max limits first. The others aren't tied in to any branding, so easier to drop rates.

    Anyhoo, rates will be going up now we've BREXITed won't they, or is Carney just another lying POS? (rhetorical question btw...).
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    When the Bank of England drops the base rate to ZERO, who thinks the TSB/LLOYDS/TESCO and Santander 123 accounts will drop their 5/4/3% rates?

    Who says BOE base is going to Zero?
  • eskbanker
    eskbanker Posts: 31,603 Forumite
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    economic wrote: »
    If that happened, I'd like to move mine but I can't see there being anything to move it into because all the other banks would be doing the same thing and Cash ISAs are a waste of time at the moment!
    put it in stocks
    Not a realistically comparable alternative - people should go into stocks if they're planning long-term investment, with sufficient appetite for risk to be able to handle the inevitable volatility, plus a reasonable amount of knowledge (or proper advice). There may be some overlap with people looking for predictable returns and instant access but they're hardly equivalent so it would be pretty foolhardy to invest in equities wholly or largely on the basis of a drop in savings rates....
  • alternate
    alternate Posts: 703 Forumite
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    they could just put the fee up, again.
  • economic
    economic Posts: 3,002 Forumite
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    eskbanker wrote: »
    Not a realistically comparable alternative - people should go into stocks if they're planning long-term investment, with sufficient appetite for risk to be able to handle the inevitable volatility, plus a reasonable amount of knowledge (or proper advice). There may be some overlap with people looking for predictable returns and instant access but they're hardly equivalent so it would be pretty foolhardy to invest in equities wholly or largely on the basis of a drop in savings rates....

    Cash not used as emergency or for a known large purchase such as a house shojld just be in stocks unless close to retirement
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