5% interest paying current accounts

[Deleted User]

ValiantSon wrote: »

Agreed. I'm pretty appalled that MSE have been plugging this so heavily.

I use Chip and Plum for direct debit manufacture only. Minimum amount (£5 for Chip) moved out of current account each time, then straight back to the safety of the current account. I would never hold savings in either of them.

ValiantSon

Deleted_User wrote: »

I use Chip and Plum for direct debit manufacture only. Minimum amount (£5 for Chip) moved out of current account each time, then straight back to the safety of the current account. I would never hold savings in either of them.

If that arrangement suits you then that's fine. My problem is with MSE heavily promoting a company who have no FSCS protection and are given free access to your bank account. I consider it to be highly irresponsible, but indicative of the way that this site is going.

OceanSound

ValiantSon wrote: »

...and are given free access to your bank account...

It's read-only access.

Also, if MSe shouldn't be heavily promoting CHIP, then it shouldn't be heavily promoting the new hsbc beta app as well, because that also requires you to input logon details of other bank(s).

With 'open banking' being introduced, sharing your internet banking logon (e.g. HSBC) with a FCA approved Payment initiation service provider (e.g. CHIP) is not frowned up as it used to be. We can always check the FCA register if the company is registered for the service being offered. e.g. Account information sharing, Payment initiation.

In some cases we have to check the principal firm's approved activities. In Chip's case its Prepaid Financial Services Ltd.

eskbanker

OceanSound wrote: »

With 'open banking' being introduced, sharing your internet banking logon (e.g. HSBC) with a FCA approved Payment initiation service provider (e.g. CHIP) is not frowned up as it used to be.

The point of open banking was to allow more secure access between institutions, using APIs to facilitate direct bank-to-bank data exchange without such user login credentials having to be disclosed and shared....

OceanSound

eskbanker wrote: »

The point of open banking was to allow more secure access between institutions, using APIs to facilitate direct bank-to-bank data exchange without such user login credentials having to be disclosed and shared....

I see. CHIP uses 'screen-scraping', not API based sharing.

ValiantSon

OceanSound wrote: »

It's read-only access.

No it isn't; they withdraw money from your account. Allowing an app to take money as it sees fit from my account is not what I would consider responsible.

OceanSound wrote: »

Also, if MSe shouldn't be heavily promoting CHIP, then it shouldn't be heavily promoting the new hsbc beta app as well, because that also requires you to input logon details of other bank(s).

I never said that they should promote that either.

I don't think they have been promoting it. You've linked a news story from 28th September 2017 and I haven't been aware of any other (and certainly not high profile) coverage since. The story is a statement of fact. This is quite different from their coverage of Chip, which MSE have pushed (prominently) in the weekly e-mail.

Having read the story that you linked, the HSBC app is completely different from Chip. The HSBC app aggregates account information and analyses spending; Chip draws money from your bank account. While HSBC plan in the future to create "savings rules"; this is still different from Chip, as they would simply do what you told them, rather than let an algorithm decide how much to take from your current account. Furthermore, the savings account you would be sending money to via HSBC's app is most likely to be with an FSCS guaranteed bank, unlike Chip.

OceanSound wrote: »

With 'open banking' being introduced, sharing your internet banking logon (e.g. HSBC) with a FCA approved Payment initiation service provider (e.g. CHIP) is not frowned up as it used to be. We can always check the FCA register if the company is registered for the service being offered. e.g. Account information sharing, Payment initiation.

Whether or not it is frowned upon is, I'm afraid, irrelevant. Using Chip takes control away from the account holder (yes, I know that in theory they can get transactions reversed). The money is moved to a non FSCS protected provider.

Personally, I think the whole open banking idea is a stupid one; it is a solution looking for a problem. Chip, however, is nothing to do with the intent of open banking, but rather exploits that.

OceanSound wrote: »

In some cases we have to check the principal firm's approved activities. In Chip's case its Prepaid Financial Services Ltd.

And?

binaryuniverse

bp5678 wrote: »

One thing worth considering is Nationwide only offer 5% interest up to £2,500 I think it is.

Someone like Satander offer a lot less interest at just 2% off the top of my head but this is up to £20,000.

So if you had say £18k in your account, you'd earn MORE interest with Santander than you would with Natwest.

The logic to this is awful. If you can get 5% on a certain amount you take that 5% and THEN distribute the rest elsewhere.

So, not taking Santander fees and other hoops in to account, the better course of action on your 18k would be to put £2500 in to NW, with the remaining £15.5k in to Santander.

bp5678

Zanderman wrote: »

Answer easily available on the nationwide website. I think it is 3 months. But why oh why would you want to leave early? There's 12 months of 5% interest to be had.

Because so many banks are offering sign up perks. You'd make more taking advantage of the sign up perks such as £100 joining rewards (gained very quickly) than you would making a measly £8 or so in interest per month. I realise over a year £8 x 12 months = almost £100 but the £100 signing up rewards with some banks is a lot more instant (you can do this with several banks in a year and make a lot more).

binaryuniverse

Or you could have both? You don't need to have just one bank account at a time.

Again. Flawed logic.

OceanSound

ValiantSon wrote: »

No it isn't; they withdraw money from your account. Allowing an app to take money as it sees fit from my account is not what I would consider responsible.

What I mean is, even if there is a data breach at CHIP and your logon and password end up in the wrong hands, they (the culprits) wouldn't be able to do much with it other than see that you've paid for a train ticket, bought a coffee etc. etc.(worst case is they can see all your payee’s account details – although this is a concern it’s not the end of the world) Fraudsters wouldn't be able to setup a new payee and transfer out, because for that they would need additional security info/device. e.g. with HSBC you need key generator.

I never said that they should promote that either.

I wasn't saying you were saying they should promote it. When you said 'free access to your bank account' it implies 'access all areas', so I was highlighting with the HSBC app you are also giving some form of access (even though it may not be as much access as you are giving to CHIP, where you are giving your logon info at the start - which presumably will be held securely).

I don't think they have been promoting it. You've linked a news story from 28th September 2017 and I haven't been aware of any other (and certainly not high profile) coverage since. The story is a statement of fact. This is quite different from their coverage of Chip, which MSE have pushed (prominently) in the weekly e-mail.

CHip is start-up, its attempting to tap (exploit) a niche-market. MSE is supporting them and making a few bob along the way as well. I must admit the promotional material could be more elaborate and tell customer what the risks are. It does up to a point. e.g. that CHIP is not covered by FSCS, but in the same breath it says 'don't worry Barlcays is covered through'.

Having read the story that you linked, the HSBC app is completely different from Chip. The HSBC app aggregates account information and analyses spending; Chip draws money from your bank account. While HSBC plan in the future to create "savings rules"; this is still different from Chip, as they would simply do what you told them, rather than let an algorithm decide how much to take from your current account. Furthermore, the savings account you would be sending money to via HSBC's app is most likely to be with an FSCS guaranteed bank, unlike Chip.

Actually, the Bank CHIP use is Barclays (which is a FSCS guaranteed bank). However it's unclear how this will protect the customer. Presumably if things go pear shaped the Money in Chip's barlcays account will go towards it's creditors first. i.e. there is no ring-fencing protecting the customers money.

Whether or not it is frowned upon is, I'm afraid, irrelevant. Using Chip takes control away from the account holder (yes, I know that in theory they can get transactions reversed). The money is moved to a non FSCS protected provider.

I'm not a fan of it either. However, when you say ‘taking control away from the account holder’ CHIP would argue their business model gives control to customers. For someone who doesn't have the time or inclination to squirrel away a few bob every week, it takes the task off their hands. It's saying ‘if you don't have the time/inclination to save-up for a holiday, car, the big-day (wedding)’ we will give you a leg-up (or push). I think, if someone is financially savvy or disciplined its probably not very useful, if not, could be a heaven-sent.

Personally, I think the whole open banking idea is a stupid one; it is a solution looking for a problem. Chip, however, is nothing to do with the intent of open banking, but rather exploits that.

I guess, this is dependent on whether you are more comfortable entering everything each time you wanna do a price comparison (for example) or handing this task to an automated system, where everything is already stored and you just click a button, off-it goes and gives you tailor made options (reminds me of a popular search engine showing ads depending on our browsing habits - so is this any different). Either way, if you get to choose, I don't really see an issue. i.e. I presume no one will force you to use open banking.

And?

For any newby wanting to see if CHIP is listed on the FCA register for ‘Account information sharing and/or Payment initiation’ activities, they would probably need to look at the principal firm's allowed activities. There was no 'hidden meaning' in what I said.

CHIP also mentions this on their website:

A Chip savings account is provided by Prepaid Financial Services (PFS), and Chip is an authorised agent of PFS – you can find us!listed on their website. PFS has an E-Money licence and is regulated by the Financial Conduct Authority (FCA). If you want to look it up on the Financial Services Register, the reference number is!900036.

Personally, I think as long as there is consent, and adequate info/awareness of what open banking entails, customers aren't pushed in to it, and always have the choice to stick with what they are familiar with, it shouldn't pose major issues.