The Top Easy Access Savings Discussion Area

cricidmuslibale

callum9999 said:

cricidmuslibale said:

MiserlyMartin said:

callum9999 said:

MiserlyMartin said:

callum9999 said:

MiserlyMartin said:

So here we go again. Who will be the first out of the blocks to raise their accounts by the full 0.75%. I suspect most will wait 3-4 weeks before doing anything. Let's face it, we are now only getting the rises 2 months after last rise to be properly passed on. Al Ryan is now at 2.81%  - Just doing a small increase before they are forced to do more after the big boys raise later.

These Banks and BS really are taking UK savers for mugs

No, a disturbingly high number of UK savers just don't understand how banks and the BOE rate works.

If a bank already has enough deposits to cover their needs then they'd be pretty stupid to voluntarily decide to pay more than they need to to borrow it from you. There's absolutely no rational reason whatsoever for savings accounts to increase their rates by 0.75% simply because the BOE rate increased by 0.75%.

What, like there is no rational reason for them to put mortgage rates up immediately?

Phillw answers this perfectly by pointing out that's exactly how tracker mortgages work, but even if they didn't, in what way is it irrational for them to increase their profit margins? Is the idea that banks try to make profit new to you?

Of course they need to raise mortgage rates immediately, by the same reason they should put savings rates up immediately, they cannot have their cake and eat it. But it sounds as though a few on here actually like being screwed savers by banks!

I think a fair and reasonable situation would be for the interest rates on like for like mortgage and savings accounts to rise and fall simultaneously; i.e. interest rates on standard variable mortgages would go up and down at exactly the same time as interest rates on easy access savings accounts, fixed rate mortgage interest rates would go up or down at the same time as fixed rate savings accounts interest rates, tracker mortgage interest rates rise and fall alongside tracker savings interest rates.

Unfortunately this is far from what tends to happen with quite a lot of savings & mortgage providers. Also tracker savings accounts are far less common than tracker mortgages, as far as I’m aware.

So I can understand to a certain extent MiserlyMartin’s exasperation with many (although not all by any means) banks and building societies.

So if a bank has £1bn in mortgage lending and £2bn in deposits, you think it's remotely rational for them to increase their revenue by 0.25% yet increase their costs by 0.5%. They can easily avoid doing this by increasing the interest rates on their mortgages by twice as much as their simultaneous interest rate increase on their savings accounts.

If a bank has more money in savings accounts than they're willing to lend out, you think they should pay extra interest to everyone despite not even needing the money in the first place? No, of course I don’t! I’m not that naïve! Where did I even suggest that in the first place?!

If you understood the reasons why banks offer savings accounts, and how they decide the interest rates, it would be very obvious why there aren't many trackers. That comment sounds very condescending and, frankly, rather rude! Of course I understand why banks offer savings accounts and how interest rates are decided! It is perfectly business friendly to offer a tracker savings account to complement a tracker mortgage account; clearly the mortgage account in this case would be designed to bring in more money in interest in this case and the savings account would be designed to bring in less money in interest!

Please see bold replies above.

uptdale

MiserlyMartin said:

chris_the_bee said:

Deleted_User said:

Zaul22 said:

Rates seemed to have stalled now because the banks have realised it's a race for 2nd place. There is no point beating Al Rayan as they will immediately beat you back again, so all the 2-2.5% banks are going up to 2.6-2.7 and still staying under Al Rayan. 

They are a minnow and don't even pay standard interest. 

They pay profit which equates to interest at the quoted rate. HMRC treat the profit as interest.

Yeah, these banks don't actually pay interest, it's profit. Whatever, good luck convincing HRMC it's not interest.

No good luck needed.  The tax treatment is in the law.  All explained by HMRC here: https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2250

Bridlington1

According to moneyfacts, Principality's double access saver will rise to 2.5%.

Minty33

Looks like Marcus has removed it's bonus to new customers  down to 2.25%

gabiieve

Minty33 said:

Looks like Marcus has removed it's bonus to new customers  down to 2.25%

Wow I only JUST got my SO to open one yesterday evening at 2.5%. Feeling pretty smug now

AndyTh_2

Minty33 said:

Looks like Marcus has removed it's bonus to new customers  down to 2.25%

That also means existing customers can't renew their bonus as well. It was once useful at a time to keep renewing it to delay the drop

jaypers

AndyTh_2 said:

Minty33 said:

Looks like Marcus has removed it's bonus to new customers  down to 2.25%

That also means existing customers can't renew their bonus as well. It was once useful at a time to keep renewing it to delay the drop

Interesting. I think things will stall a bit now, or at least until 15/12 (next BOE decision). Think easy access rates have peaked for now, so if you can get 2.75% you’re doing well and I also think fixed if anything May drop slightly as they are based on gilts. I’ve just opened another 1 year fixed…….drip feeding every 3 months with a new one. Bit of a lottery but I’m reasonably happy what I’m getting at the moment. 

t1redmonkey

jaypers said:

AndyTh_2 said:

Minty33 said:

Looks like Marcus has removed it's bonus to new customers  down to 2.25%

That also means existing customers can't renew their bonus as well. It was once useful at a time to keep renewing it to delay the drop

Interesting. I think things will stall a bit now, or at least until 15/12 (next BOE decision). Think easy access rates have peaked for now, so if you can get 2.75% you’re doing well and I also think fixed if anything May drop slightly as they are based on gilts. I’ve just opened another 1 year fixed…….drip feeding every 3 months with a new one. Bit of a lottery but I’m reasonably happy what I’m getting at the moment. 

I reckon we'll see some at 3% before the month's end.  This is normal for banks to give it a few weeks after a base rate increase before increasing their own rates, it gives them time to make some profit.

chris_the_bee

AndyTh_2 said:

Minty33 said:

Looks like Marcus has removed it's bonus to new customers  down to 2.25%

That also means existing customers can't renew their bonus as well. It was once useful at a time to keep renewing it to delay the drop

Any idea from past experience when they are likely to re-introduce the bonus?

callum9999

cricidmuslibale said:

callum9999 said:

cricidmuslibale said:

MiserlyMartin said:

callum9999 said:

MiserlyMartin said:

callum9999 said:

MiserlyMartin said:

So here we go again. Who will be the first out of the blocks to raise their accounts by the full 0.75%. I suspect most will wait 3-4 weeks before doing anything. Let's face it, we are now only getting the rises 2 months after last rise to be properly passed on. Al Ryan is now at 2.81%  - Just doing a small increase before they are forced to do more after the big boys raise later.

These Banks and BS really are taking UK savers for mugs

No, a disturbingly high number of UK savers just don't understand how banks and the BOE rate works.

If a bank already has enough deposits to cover their needs then they'd be pretty stupid to voluntarily decide to pay more than they need to to borrow it from you. There's absolutely no rational reason whatsoever for savings accounts to increase their rates by 0.75% simply because the BOE rate increased by 0.75%.

What, like there is no rational reason for them to put mortgage rates up immediately?

Phillw answers this perfectly by pointing out that's exactly how tracker mortgages work, but even if they didn't, in what way is it irrational for them to increase their profit margins? Is the idea that banks try to make profit new to you?

Of course they need to raise mortgage rates immediately, by the same reason they should put savings rates up immediately, they cannot have their cake and eat it. But it sounds as though a few on here actually like being screwed savers by banks!

I think a fair and reasonable situation would be for the interest rates on like for like mortgage and savings accounts to rise and fall simultaneously; i.e. interest rates on standard variable mortgages would go up and down at exactly the same time as interest rates on easy access savings accounts, fixed rate mortgage interest rates would go up or down at the same time as fixed rate savings accounts interest rates, tracker mortgage interest rates rise and fall alongside tracker savings interest rates.

Unfortunately this is far from what tends to happen with quite a lot of savings & mortgage providers. Also tracker savings accounts are far less common than tracker mortgages, as far as I’m aware.

So I can understand to a certain extent MiserlyMartin’s exasperation with many (although not all by any means) banks and building societies.

So if a bank has £1bn in mortgage lending and £2bn in deposits, you think it's remotely rational for them to increase their revenue by 0.25% yet increase their costs by 0.5%. They can easily avoid doing this by increasing the interest rates on their mortgages by twice as much as their simultaneous interest rate increase on their savings accounts.

If a bank has more money in savings accounts than they're willing to lend out, you think they should pay extra interest to everyone despite not even needing the money in the first place? No, of course I don’t! I’m not that naïve! Where did I even suggest that in the first place?!

If you understood the reasons why banks offer savings accounts, and how they decide the interest rates, it would be very obvious why there aren't many trackers. That comment sounds very condescending and, frankly, rather rude! Of course I understand why banks offer savings accounts and how interest rates are decided! It is perfectly business friendly to offer a tracker savings account to complement a tracker mortgage account; clearly the mortgage account in this case would be designed to bring in more money in interest in this case and the savings account would be designed to bring in less money in interest!

Please see bold replies above.

1. No they can't... They don't just decide what the mortgage rates will be, it's contracted. It's also utterly ridiculous to double the interest on their mortgages to compensate for large savings deposits. Their mortgages will become uncompetitive, people will leave and now their savings excess is even higher.

2. You didn't suggest it - my point was that you don't seem to understand it. Banks set their savings interest rates in order to generate sufficient deposits for their balance sheet. You demanding that they increase their savings rates when they don't need the money is effectively saying this.

3. I see how it could come across as rude (sorry), but it's difficult to not seem condescending when you're trying to explain simple concepts to someone who refuses to believe it.

You keep claiming you understand it, but it's abundantly clear you don't. Relying on tracker savings accounts is beyond absurd - you've already acknowledged there can be a large mismatch between mortgage lending and saving deposits, how on Earth is this a rational business move? How would this work in the scenario I gave at the beginning?