What do you think about my idea - re Banking

chrissy3634

Instead of offering rewards to SWITCH why don't they reward their loyal customers with a BONUS REWARD to stay. :beer:

Chino

Why should "loyal customers" be rewarded for their laziness in not looking around for a better deal?

Wyndham

Because banks want to make money. They want to attract more customers with bright shiny deals, then reel them in and hope they get into trouble and they can charge them lots of interest.

Banks are not your friend.

le_loup

chrissy3634 wrote: »

Instead of offering rewards to SWITCH why don't they reward their loyal customers with a BONUS REWARD to stay. :beer:

Nationwide do just that.

colsten

le_loup wrote: »

Nationwide do just that.

Do they? How, please?

Cotta

le_loup wrote: »

Nationwide do just that.

Do they? If you're referring to the "Refer a Friend" scheme that is something different.

eskbanker

I imagine that le loup was referring to products such as their Loyalty ISA, where "The interest rate is tiered and linked to the length of continuous membership with us. You will automatically move up the tiers from 1 year, to 5 years, to 10 years, up to a maximum of 15 years."

As a non-HTB variable cash ISA, the rates are still pretty poor compared with other savings products on the market, but they do clearly offer some incentive to their most loyal customers versus newcomers....

colsten

The Nationwide "Loyalty" products are nothing more than Marketing spin. They are terrible value. More than that, Nationwide themselves have been offering, to existing and to new customers, better interest rates on their products which weren't dubbed "loyalty"

They do still have a good Regular Saver but that is for a limited amount of money only. And available to existing and new customers.

JuicyJesus

If rewarding "loyal" customers was a winner for the banks in some way they'd already be doing it.

As it is, giving increasing benefits to people who have been with you donkey's years just loses you money. Particularly when current accounts tend to be loss leaders anyway.

EachPenny

colsten wrote: »

The Nationwide "Loyalty" products are nothing more than Marketing spin. They are terrible value. More than that, Nationwide themselves have been offering, to existing and to new customers, better interest rates on their products which weren't dubbed "loyalty"

They do still have a good Regular Saver but that is for a limited amount of money only. And available to existing and new customers.

I agree 100%. People also look at the Loyalty Saver top rate of 1.1% and think that is ok, but that is only available after 15 years. That's a lot of loyalty.

A brand new customer can earn 5% on £2500 for the first year with a FlexDirect account. Thereafter they get 1%. For between 10 and 15 year's loyalty, the rate is only 0.95%, so even in the second and subsequent years the FlexDirect account pays 'new' customers a higher rate than a 14 year 'loyal' member. For some of us the £2500 balance limit is quite restrictive, but we possibly forget that having a limit of £2500 is more than adequate for a lot of people.

On the ISA side, main current account customers (which can be anyone) can get 1.1% on the Flexclusive ISA as a brand new customer. It takes 15 years to reach 1.1% on the Loyalty ISA.

A customer who has 5 year's membership get 0.85% on the Loyalty ISA - it would be fairer for Nationwide to encourage those customers to open a FlexDirect account to make themselves eligible for the Flexclusive ISA instead. (this applies to all customers up to the 15 year point, and even then the Loyalty ISA offers no additional benefit).

By offering a "Loyalty" product, Nationwide might be misleading some members into using a product which is less beneficial for them than other Nationwide products. This is not something I think a mutual should be doing.

EachPenny

eskbanker wrote: »

As a non-HTB variable cash ISA, the rates are still pretty poor compared with other savings products on the market, but they do clearly offer some incentive to their most loyal customers versus newcomers....

The only incentive (at current rates) is not to need to open a separate FlexDirect account. Since there is no requirement to do anything with the FlexDirect account once opened, that incentive is very marginal.

Obviously there is the potential for rates to be changed in the future, and for products to be withdrawn for new applicants... but a savvy member can easily hedge against those risks.