ISA and non-ISA interest rates

RG2015

glennevis said:

Virgin Money do offer the same interest rate for ISA and non-ISA savings (e.g. their two Double Take accounts) so if they can do it why can't other banks?

It is an even better picture for their fixed rate ISAs.

Virgin Money currently offer 1 and 2 year bonds at 1.00% and 1.20% respectively whereas the equivalent rates for ISAs are 1.36% and 1.50%

Admittedly, the bond rates are poor in comparison to the competition but the ISA rates are amongst the best available and their 3 year ISA at 1,55% is currently the market leader. 

Thrugelmir

glennevis said:

Virgin Money do offer the same interest rate for ISA and non-ISA savings (e.g. their two Double Take accounts) so if they can do it why can't other banks?

How competitive are the rates on offer? 

RG2015

Thrugelmir said:

glennevis said:

Virgin Money do offer the same interest rate for ISA and non-ISA savings (e.g. their two Double Take accounts) so if they can do it why can't other banks?

How competitive are the rates on offer? 

The VM double take ISA is the market leader and the double take non ISA is in second place. It may not be completely comparable with unlimited access but for many it is a good option.

PS I should have said that I am using the tables on Savings Champion and their market leading status is not really accurate owing to the limited access.

Thrugelmir

RG2015 said:

Thrugelmir said:

glennevis said:

Virgin Money do offer the same interest rate for ISA and non-ISA savings (e.g. their two Double Take accounts) so if they can do it why can't other banks?

How competitive are the rates on offer? 

The VM double take ISA is the market leader and the double take non ISA is in second place. It may not be completely comparable with unlimited access but for many it is a good option.

Commercial decision to attact retail deposits. Market leaders rarely stay for extended periods. 

RG2015

Thrugelmir said:

RG2015 said:

Thrugelmir said:

glennevis said:

Virgin Money do offer the same interest rate for ISA and non-ISA savings (e.g. their two Double Take accounts) so if they can do it why can't other banks?

How competitive are the rates on offer? 

The VM double take ISA is the market leader and the double take non ISA is in second place. It may not be completely comparable with unlimited access but for many it is a good option.

Commercial decision to attact retail deposits. Market leaders rarely stay for extended periods. 

Agreed, but it does demonstrate that some of the Virgin Money rates are competitive.

masonic

glennevis said:

Virgin Money do offer the same interest rate for ISA and non-ISA savings (e.g. their two Double Take accounts) so if they can do it why can't other banks?

Indeed, it appears they are cross-subsidising their ISA rates by keeping some of their non-ISA rates low. I don't have a problem with that as people are free to shop around for the best accounts. It's no worse than the practice of having a market leading account for new customers, and moving existing customers onto a lower rate.

dmart7 said:

On the other hand, I take masonic's point about costs, but am not sure it justifies the difference.  And historically, I don't recall it being this way.

Historically ISA providers were often able to match or even better the rates on offer vs normal savings accounts with little impact on other rates, because they were paying interest on relatively low sums held in cash ISAs. Then the annual allowance went up significantly, and transfers from S&S ISAs to cash ISAs were permitted, this soon became untenable. Even back in the 2000s there were accounts for 'new money only' paying more than accounts accepting transfers.

Thrugelmir

RG2015 said:

Thrugelmir said:

RG2015 said:

Thrugelmir said:

glennevis said:

Virgin Money do offer the same interest rate for ISA and non-ISA savings (e.g. their two Double Take accounts) so if they can do it why can't other banks?

How competitive are the rates on offer? 

The VM double take ISA is the market leader and the double take non ISA is in second place. It may not be completely comparable with unlimited access but for many it is a good option.

Commercial decision to attact retail deposits. Market leaders rarely stay for extended periods. 

Agreed, but it does demonstrate that some of the Virgin Money rates are competitive.

Lenders only require deposits when they've borrowing to fund. Rates drop when lenders have an excess of liquidity. 

RG2015

Barclays have just jumped in with a three year flexible cash ISA at 1.70%. It looks like the build up to the end of the tax year has started.

https://www.barclays.co.uk/savings/isas/

masonic

RG2015 said:

Barclays have just jumped in with a three year flexible cash ISA at 1.70%. It looks like the build up to the end of the tax year has started.

https://www.barclays.co.uk/savings/isas/

That compares quite favourably to the 1.85% offered in the non-ISA fixed term market. Perhaps 'ISA season' will become a thing again.