The Top Easy Access Savings Discussion Area

Daliah

ranciduk said:

I’m a long suffering Halifax customer 

If you are suffering, why haven't you voted with your feet a long time ago?

Daliah

ranciduk said:

I get that they offer poor rates to existing customers cos a lot of them are too lazy to move

but why don’t they crave new customers?? I thought the point of banks was to get as much money as possible!

the Halifax could easily put out a cash isa at say 4% - and people would come flooding in , in droves

so why don’t they do this? Why don’t they want all that extra cash ?!

Saving accounts are liabilities for the providers. They will be balancing these liabilities with their expected income from lending (mortgages, loans, credit cards, overdrafts) taking into account the profit they can make. It is not in their interest to pay high interest rates, so they only offer good rates when they have to. 

wmb194

ranciduk said:

Bridlington1 said:

mlc2009 said:

Any reason why the big banks such as Barclays/HSBC haven't passed on the base rate increase to savers?

Is it as simple as they don't need the money?

The simple fact is that banks/building societies will keep their savings rates low for as long as they think they can get away with it. There are a lot of people out there who like to do all of their banking with one bank and will not switch for love nor money and most of these people are with the main banks. The banks know this and are able to pay dismal savings rates to most of their customers without seeing a mass exodus of cash.

Most of the challenger banks on the other hand are relatively new to the market and so have had to entice customers with a higher interest rate, thus resulting in a far higher proportion of their customers being prepared to move their money to wherever offers the best savings rate. As a result of this these challenger banks must remain competitive in order to keep their new found customer base and thus increase their savings rates far more readily than the big banks.

I get that they offer poor rates to existing customers cos a lot of them are too lazy to move

but why don’t they crave new customers?? I thought the point of banks was to get as much money as possible!

the Halifax could easily put out a cash isa at say 4% - and people would come flooding in , in droves

so why don’t they do this? Why don’t they want all that extra cash ?!

Beyond the odd regular saver or current account incentive, they just don't need to offer market leading rates. Don't forget that Lloyds, Barclays, HSBC and the like have large numbers of price insensitive non-retail customers with massive deposits, other banks are willing to lend to them cheaply and they find it a lot easier to borrow from the Bank as they have a lot more of the required collateral (gilts). They just don't have to compete for funding in the way that the smaller, riskier credit players do.

Thirty9

Supply and demand. The golden rule of eco nomics. 

Thumbs_Up

ranciduk said:

the Halifax could easily put out a cash isa at say 4% - and people would come flooding in , in droves

so why don’t they do this? Why don’t they want all that extra cash ?!

Thank you Darling......Er, that’s Alistair Darling, when he instigated the quantitative easing program way back in 2008 nearly £900 billion was pumped into the economy at current figures.

Halifax has to maintained banks and ATM’s on the high streets.

Halifax is a well known brand name the challenge banks are not.

Halifax can raise cheap money from other banks, perhaps challenger banks cannot.

2010

People should vote with their feet.
If they`re lethargic about their savings, it`s their own fault.
Loyalty went out the window a long time ago.

mlc2009

Would anyone keep more than 85k with Barclays/HSBC if they raised rates?

Daliah

mlc2009 said:

Would anyone keep more than 85k with Barclays/HSBC if they raised rates?

I wouldn't.

gt94sss2

mlc2009 said:

Would anyone keep more than 85k with Barclays/HSBC if they raised rates?

Yes, I would

soulsaver

deleted

Thought I'd post this up in case any visitors wondered where the 'Top Easy Access Discussion' was.... 

ETA: Updated a few pages below.