The Top Easy Access Savings Discussion Area

TiVo_Lad

jimexbox said:

...There is zero incentive for banks to raise savings rates. 

Au contraire. Every financial institution has their own unique loan book with different underlying financing rates and maturities, so they will take individual decisions about their cash needs. If they have funding that is maturing, they will need to go to the market and the BoE Base Rate will be a major determinant of the prevailing market rate; if they need cash they need to attract it. Not every financial institution has access to funds from every source; most "high street" banks can get cash more or less anywhere which iswhy they rarely offer market leading rates, whereas the lower tier institutions will be more reliant on consumer cash.

They also need to balance the funding portfolio and keep it stable; portions of consumer cash are notoriously "flighty" (primarily held by those that haunt these forums) so if they want to hold on to consumer's cash they either need to offer a very attractie rate or, as we have increasingly seen, force consumers to go through hoops to get their cash out.

Band7

Zerforax said:

I thought we would see some increases before the expected increase by the Bank of England tomorrow but doesn't seem like it?

NS&I upped the rate on their Direct Saver to 2.3% yesterday (yawn)

Also yesterday, they upped the average return from Premium Bonds to 3%. Highly attractive for HR tax payers as this equates to 5% before tax. Obviously it comes with the risk of getting less than 3%, but also with a small chance for even higher than 3% tax free. And is easy access.

Even BR tax payers might want to have a go, as it could be the equivalent of 3.75% or more. Or less.....

liamcov

Band7 said:

Zerforax said:

I thought we would see some increases before the expected increase by the Bank of England tomorrow but doesn't seem like it?

NS&I upped the rate on their Direct Saver to 2.3% yesterday (yawn)

Also yesterday, they upped the average return from Premium Bonds to 3%. Highly attractive for HR tax payers as this equates to 5% before tax. Obviously it comes with the risk of getting less than 3%, but also with a small chance for even higher than 3% tax free. And is easy access.

Even BR tax payers might want to have a go, as it could be the equivalent of 3.75% or more. Or less.....

How often does the Direct Saver pay interest? Same for everyone or depends when opened etc?

Band7

Annually on April 1st (not a joke)

FindingBBob

TiVo_Lad said:

jimexbox said:

...There is zero incentive for banks to raise savings rates. 

Au contraire. Every financial institution has their own unique loan book with different underlying financing rates and maturities, so they will take individual decisions about their cash needs. If they have funding that is maturing, they will need to go to the market and the BoE Base Rate will be a major determinant of the prevailing market rate; if they need cash they need to attract it. Not every financial institution has access to funds from every source; most "high street" banks can get cash more or less anywhere which iswhy they rarely offer market leading rates, whereas the lower tier institutions will be more reliant on consumer cash.

They also need to balance the funding portfolio and keep it stable; portions of consumer cash are notoriously "flighty" (primarily held by those that haunt these forums) so if they want to hold on to consumer's cash they either need to offer a very attractie rate or, as we have increasingly seen, force consumers to go through hoops to get their cash out.

I don't disagree with a lot of this  - but it worth noting that during recent Christmas periods a number of brands at the top of the table withdrew their products or restricted to existing customers only. These tend to be smaller providers so will not have a full staff during the Xmas period-  I dont expect rates to drop, but products will disappear.   Banks that have large maturing books in Jan will have already brought that money in etc.. they wont try to do it over this period. 

Zaul22

Well, here we are the day before the BOE day and still no Zopa. They really have given up. I know banks only put the rates up when they need more money, not to compete in the top 10, but they still have to stop people withdrawing all the money they already have (as most people here have said they have by now).

TiVo_Lad

Zaul22 said:

Well, here we are the day before the BOE day and still no Zopa. They really have given up.

It may simply be a reflection of the state of their lending business or how they financed their loan book the last time around. I suspect we'll see some movement in the market after the BoE rate announcement (albeit not necessarily immediately). Everyone's expecting 50bps so it's likely most financial institutions will have modelled that already and are ready to push the button when the time is right for them. Some want first mover advantage while others are happy to let the dust settle.

RG2015

Zaul22 said:

Well, here we are the day before the BOE day and still no Zopa. They really have given up. I know banks only put the rates up when they need more money, not to compete in the top 10, but they still have to stop people withdrawing all the money they already have (as most people here have said they have by now).

Why blame Zopa (or any other bank that doesn’t raise their rates)?

If their customers withdrew all their money, they would raise their rates pretty quickly.

You should be blaming the customers.

Band7

Chorley 6 access saver 2.75% from today.

https://www.chorleybs.co.uk/savings-rate-increase/

Also some increases on NLA accounts.

Johnjdc

RG2015 said:

Zaul22 said:

Well, here we are the day before the BOE day and still no Zopa. They really have given up. I know banks only put the rates up when they need more money, not to compete in the top 10, but they still have to stop people withdrawing all the money they already have (as most people here have said they have by now).

Why blame Zopa (or any other bank that doesn’t raise their rates)?

If their customers withdrew all their money, they would raise their rates pretty quickly.

You should be blaming the customers.

Where would they move it to, though? Unless we all go into shares, foreign assets, or gold bars, the impact of people moving their money away from poor rates more actively would just be to herd more rates towards the average - making the situation worse for those of us who shop around!