Banks may have to give loyal customers better interest rates - MSE News

harz99

badger09 wrote: »

But harz99's desire is that existing savers in easy access accounts always be offered the best available rate for those products at the time. What you are suggesting is that existing savers automatically be transferred to the higher paying account. That may be what harz99 desires, but isn't what he/she said.

In your Tesco example, savers are free to open the new account, so they are offered the best available rate.

I'm really not trying to be awkward, I just think savers should take some personal responsibility:cool:

I can't comment on the Yorkshire scenario you mention, but was it the case that existing savers were excluded from that better deal?
My experience has been that occasionally on maturity of a fixed rate account, as an existing saver, I was offered a slightly better rate than that available generally.

I thought my last sentence made it quite clear what I was saying.


And yes I get that you prefer to see everyone taking "some personal responsibility", however that is not always practicable or efficient use of time and resources, especially when rates and thus interest amounts, are low as now.


I don't think it unreasonable to expect to have the ability to be treated the same way as banks treat savers in easy access accounts when variable rates decrease.


Similarly I don't see why fixed rate and thus fixed term savers, cannot be guaranteed the best available rate on the day when they roll over an existing account.

eskbanker

badger09 wrote: »

But harz99's desire is that existing savers in easy access accounts always be offered the best available rate for those products at the time. What you are suggesting is that existing savers automatically be transferred to the higher paying account. That may be what harz99 desires, but isn't what he/she said.

In your Tesco example, savers are free to open the new account, so they are offered the best available rate.

I'd agree with your line of argument if Tesco were offering a new product called Online Saver or some such, or if they were replacing Issue N with Issue N+1, but my point was that it's exactly the same variable rate Internet Saver account, differentiated only by opening date. I've just checked it again out of curiosity and see that the same product is now available at 1.34%, but in order to benefit from that I'd have to open yet another one.

badger09 wrote: »

I'm really not trying to be awkward, I just think savers should take some personal responsibility:cool:

Likewise; I do fundamentally agree with this, but that doesn't necessarily mean that the banks shouldn't be expected to improve their practices!

badger09 wrote: »

I can't comment on the Yorkshire scenario you mention, but was it the case that existing savers were excluded from that better deal?
My experience has been that occasionally on maturity of a fixed rate account, as an existing saver, I was offered a slightly better rate than that available generally.

I've found the thread I was thinking of: https://forums.moneysavingexpert.com/discussion/5829158/fixed-isa-maturing-be-careful

However, I don't believe the issue is whether or not existing savers can access the same deals as new applicants, it's more about whether this should happen (as a minimum) by default....

dale_cotterill

I thought the point of the FCA was to regulate, not to interfere with markets.



Not sure who comes up with these ridiculous idea, I can only presume people who have never actually lived a day in the real world at all.


Lets see, Christopher Woolard;
Civil Service
BBC Trust
Ofcom
FCA


What a surprise, a full history in roles with no competition and minimal exposure to actual markets.


In reality, what is the most likely outcome if this went in;


- Most banks and building societies slash rates on their variable rate products in line with their lowest paying product to set the basic standard rate



- Those who switch anyway will continue to switch and may pick up some better deals


- Those who don't switch will be even worse off as they will now be getting virtually nothing instead of very little.


- No institution is going to be able to unilaterally raise their lowest rates and it not to have an impact on either their ability to attract new funding, or offer competitive mortgage rates.


These career bureaucrats just need to stop wasting everyones time and money by getting involved in these things and just let the market take its course.



Those who are savvy are subsidised by those who don't bother doing anything. It's very fair, you get paid for making and effort, or accept getting less as not needing to put any effort in.

dealer_wins

Do Tescos have to give me cheaper groceries, and Primark cheaper clothes then, and the London tube cheaper tickets, or is this just more bank bashing.

Paul_Herring

dale_cotterill wrote: »

I thought the point of the FCA was to regulate, not to interfere with markets.

Where ever did you get that idea? The Gravy Train has do continue somehow....

Sea_Shell

Aha. So the scenarios are...

a) If all the "non-switchers" were all put on a real BASE level interest...say 0.05%, then that'll at least keep banks etc. willing to offer better deals on new accounts/customers.

b) My worry is that if everyone had to move to say 0.5% base, then some of the better deals would get cut.


I vote for "A" !!

Paul_DNAP

badger09 wrote: »

I can't comment on the Yorkshire scenario you mention, but was it the case that existing savers were excluded from that better deal?

I believe that was a reference to my thread about the "do nothing" option on a maturing fixed rate fixed term account not being very favourable and the account options given in the maturity letter being lower than the advertised rates for the same account terms:
https://forums.moneysavingexpert.com/discussion/5829158/fixed-isa-maturing-be-careful


And no, the loyal customer wasn't excluded from the better accounts, but it needed a branch visit to actually ask for the better account to be used, whereas a more lethargic loyal customer who did nothing or relied only on the info in the letter would have been losing money on the deal, which is the situation this report is mainly concerned about I think.

MK62

eskbanker wrote: »

I'd agree with your line of argument if Tesco were offering a new product called Online Saver or some such, or if they were replacing Issue N with Issue N+1, but my point was that it's exactly the same variable rate Internet Saver account, differentiated only by opening date. I've just checked it again out of curiosity and see that the same product is now available at 1.34%, but in order to benefit from that I'd have to open yet another one.

It's interesting that Tesco do not apply the same approach when rates go down - they don't then only offer the new rate on new accounts, it applies across the board.

ColdIron

MK62 wrote: »

It's interesting that Tesco do not apply the same approach when rates go down - they don't then only offer the new rate on new accounts, it applies across the board.

The Tesco Internet Saver has 2 rates. The bonus rate which is fixed for one year and cannot change and the standard rate which is variable. The standard rate went down from 0.75% to 0.40 % in November 2016 in response to the BoE reduction of and to 0.25%, this was applied across the board to all accounts. It rose from 0.40% to 0.55% November 2017 when the BoE restored its rate to 0.50%. Again this was applied across the board to all accounts

MK62

ColdIron wrote: »

The Tesco Internet Saver has 2 rates. The bonus rate which is fixed for one year and cannot change and the standard rate which is variable. The standard rate went down from 0.75% to 0.40 % in November 2016 in response to the BoE reduction of and to 0.25%, this was applied across the board to all accounts. It rose from 0.40% to 0.55% November 2017 when the BoE restored its rate to 0.50%. Again this was applied across the board to all accounts

Yes I know that, I have one.....

The full rate cut of 0.25% plus a further reduction of 0.1% was applied across the board.

The approach was then not the same when rates rose again, only part of the BoE 0.25% rise was applied across the board, 0.15%.
To get the full rise, you had to apply for a new account with a better bonus rate.....except the very next day they then dropped the bonus rate by.....0.15%, so you had to wait for the next bonus rise and then apply for another account.

It's all very tedious tbh.......