The Top Easy Access Savings Discussion Area

fabsaver

TheMightySwordfish said:

Is anyone actually seeing 5% in the app for Tandem? I already had the account and it's still showing 4.36%. 

The rate doesn't update until tomorrow for existing accounts. It's in the email which should be on the way to you.

jaypers

Eirambler said:

jaypers said:

So I’ve been against opening any more accounts but Tandem’s move today has made me change my mind. I think the 5% Easy Access threshold is a psychological no brainer, at least for me, and a very clever move on Tandem’s part. Wasn’t very long ago that people on here could hardly dare dream about 4% being broken……I guess in Atom’s case there is still work to be done there! Sure there are a few other Banks reworking their strategy now so going to be interesting. Would love to know how many millions have already gone into Tandem accounts today!  

I was actually thinking it was maybe a tactical misstep on Tandem's part. They could have just gone to say 4.75 and been comfortably the top easy access that is available to new applicants. That would have brought a lot of new money their way. Going that jump further to 5% is likely going to send literally hundreds of millions of pounds their direction this week. I hope they have a solid strategy for how they're going to turn that influx of relatively expensive cash into a sustainable profit...at 5% a few other banks might say "off you go" and focus more on different products instead.

I'm no banker, but if I was I'd suggest there's a lot of more profitable money to be brought in by introducing an easy access ISA at 4.6% or 4.7% or thereabouts, rather than chasing down Tandem's 5% offering.

That’s an interesting perspective. I was thinking that they are maybe positioning themselves for the inevitable scenario that the gap between Easy Access accounts and fixed accounts is very likely to be a narrow one very soon. I can see the fixed accounts stalling now, or even dropping slightly as interest rate rises are likely to slow down/stop soon. Being ahead of the pack now means money locked in and people won’t bother moving. Honestly, who’s going to top this by much? CHIP have a big dilemma too……5.05% maybe, but no point in moving. Could turn out a shrewd move on Tandem’s part. 

Rollinghome

nic_c said:

Rollinghome said:

nic_c said:

Eirambler said:

Right Tandem, you're on the clock. You have until Friday morning...

Why? Either you're happy with your money being with them at 4.36% and know they'll raise at some point, or you're not as there is better elsewhere. What happens if they raise Friday afternoon?

It appears that Eirambler has decided to wait a few days to see if Tandem will improve their rate.  That doesn't seem so unreasonable to me.

Could you clarify what it is you think they should do?  Is it that they should have jumped the instant a higher rate was offered elsewhere?  Or that they should stay with Tandem indefinitely regardless of the rate being paid?  (Would that equally to banks such as AlRayan who were once top payers but seem to have shifted from that policy and currently pay an expected profit rate of just 4.00% on EA account?) Or do you have a far better approach?

Could it be that you've calculated a specific differential between rates for when it's right to move and when it's not? I'm puzzled.

It's not for me to clarify, as each have their own triggers and priorities. Some will chase the highest payer even if it's 0.1% differential, others may be happy if their rate is within 0.2% or so.

I guess the threat worked, as the rate is going up

It was your post that I'd have liked clarified.  But if that's too tricky, that's fine, we'll leave your post as a mystery.

Zopa_Trooper

It may be because the actual rate is 4.65%, the 0.35% extra is a top up.

subjecttocontract

Then there are the rest like me, happily already about to get 4.8% who can't be bothered to open a Tandem account for the sake of an extra £80 a year. It's unlikely to be a year in all reality because someone else will be along well before the year is up offering something else.

TheMightySwordfish

Thanks for the feedback 👍

pecunianonolet

jaypers said:

Eirambler said:

jaypers said:

So I’ve been against opening any more accounts but Tandem’s move today has made me change my mind. I think the 5% Easy Access threshold is a psychological no brainer, at least for me, and a very clever move on Tandem’s part. Wasn’t very long ago that people on here could hardly dare dream about 4% being broken……I guess in Atom’s case there is still work to be done there! Sure there are a few other Banks reworking their strategy now so going to be interesting. Would love to know how many millions have already gone into Tandem accounts today!  

I was actually thinking it was maybe a tactical misstep on Tandem's part. They could have just gone to say 4.75 and been comfortably the top easy access that is available to new applicants. That would have brought a lot of new money their way. Going that jump further to 5% is likely going to send literally hundreds of millions of pounds their direction this week. I hope they have a solid strategy for how they're going to turn that influx of relatively expensive cash into a sustainable profit...at 5% a few other banks might say "off you go" and focus more on different products instead.

I'm no banker, but if I was I'd suggest there's a lot of more profitable money to be brought in by introducing an easy access ISA at 4.6% or 4.7% or thereabouts, rather than chasing down Tandem's 5% offering.

That’s an interesting perspective. I was thinking that they are maybe positioning themselves for the inevitable scenario that the gap between Easy Access accounts and fixed accounts is very likely to be a narrow one very soon. I can see the fixed accounts stalling now, or even dropping slightly as interest rate rises are likely to slow down/stop soon. Being ahead of the pack now means money locked in and people won’t bother moving. Honestly, who’s going to top this by much? CHIP have a big dilemma too……5.05% maybe, but no point in moving. Could turn out a shrewd move on Tandem’s part. 

An alternative strategy could be to attract hundreds of millions and diversify that volume on Tandem side into various gilts, BOE overnight, more aggressive lending, etc. so by the time rates start to drop, and Tandem might see this happening sooner than later, they have funds locked in in vast volume into various higher rate products and when rates fall they are becoming profitable, the more rapid the falls the higher their profits as they can reduce easy access rates with short notice.

If they attract cash long term with fixes and ISAs they also need to make those returns long term and they might see this as an issue. The smaller the spread between what they generate and what they have to pay savers means simply that they need to turn over much higher sums, so we talk hundreds of millions or even billions. Also, their fixed cost are much lower as app only bank vs. many other players, e.g. building societies.

I am sure they have worked out a well balanced hedge to be able to operate daily in and out flows vs. longer term outlook profits and locked in rates.

I wouldn't say they are short in the housing market but since 2008 and the crash, many things have changed, but the finance world is still a very well working casino after all.

jimexbox

Not that long ago many (including myself) were dreaming of a one year fixed at 5% AER. 

TiVo_Lad

It certainly does feel like Tandem are calling the market. The cash flows over the next day or so will determine whether others react. Still waiting to hear from Principality, Oxbury, DF Capital and Clearbank (via CHIP).

13zero8

Great rate move Tandem. Now you just need to stop the app from logging me out so frequently and needing sms verification to log back in.