Savings Interest Rates Reductions

D3xt3r5L4b

Who’s really to blame?
The drop in the BOE base rate, or are banks trying to claw money back from offering payment holidays and the like for 3 months and losing out on late payment charges and overdraft interest etc?

colsten

5G  innit 

Thrugelmir

BOE base. Banks are only able to deposit excess overnight liquidity at that rate with the BOE. 

JezR

A number of savings institutions dropped rates in February and early March. At the time this was analysed as an anticipation of an anticipated drop in base rates for general economic reasons. However, many of these dropped the rate again in full later in March. Others have dropped rates by over 1% in response to the 0.65% drop in BR.

Albermarle

Just had two letters from Nationwide:
Cash ISA ( one withdrawal allowed a year ) 1.4% to 0.25%
Instant savings account 1.1% to 0.25%
Bigger drop than I expected 

Alexland

D3xt3r5L4b said:

are banks trying to claw money back from offering payment holidays and the like for 3 months and the like for 3 months

Why would Banks be unhappy about mortgage payment holidays when they will roll up the additional interest charges into the reminder of the mortgage term? They should be delighted as their core business is attracting customers who want to borrow money and pay interest.

Albermarle said:

Just had two letters from Nationwide:

I'm expecting Nationwide to write and tell us our young kids' Future Saver accounts are dropping from 3.5% down to 1% which doesn't make the accounts worth keeping. Might as well stick all the money into their S&S JISAs and pray for better times.

evenasus

Albermarle said:

Just had two letters from Nationwide:
Cash ISA ( one withdrawal allowed a year ) 1.4% to 0.25%
Instant savings account 1.1% to 0.25%
Bigger drop than I expected 

Me too. Going to take it out of the ISA. No point in an ISA, especially as I don't pay tax.

Thrugelmir

Alexland said:

D3xt3r5L4b said:

are banks trying to claw money back from offering payment holidays and the like for 3 months and the like for 3 months

Why would Banks be unhappy about mortgage payment holidays when they will roll up the additional interest charges into the reminder of the mortgage term? They should be delighted as their core business is attracting customers who want to borrow money and pay interest.

Potential defaults. How many of these customers were already bordering on the financial cliff edge before the current crisis started to unfold. Recovery is going to be far from painless. 

D3xt3r5L4b

Alexland said:

D3xt3r5L4b said:

are banks trying to claw money back from offering payment holidays and the like for 3 months and the like for 3 months

Why would Banks be unhappy about mortgage payment holidays when they will roll up the additional interest charges into the reminder of the mortgage term? They should be delighted as their core business is attracting customers who want to borrow money and pay interest.

Albermarle said:

Just had two letters from Nationwide:

I'm expecting Nationwide to write and tell us our young kids' Future Saver accounts are dropping from 3.5% down to 1% which doesn't make the accounts worth keeping. Might as well stick all the money into their S&S JISAs and pray for better times.

I'm sure the Smart Junior ISA's we have for our 2 kids will be dropping.
But since they can't "touch" the money until they're 18, we cannot close the account, only "transfer" it to another Junior ISA - is that correct?

Alexland

Yes if the money is in JISA wrapper you would need to ask another JISA provider to transfer it. Coventry are still offering 3.6% although I wonder how long that will last.

Our letters arrived today, blaming the Bank of England for the 2.5% rate reduction, so I logged in and closed the kids accounts to stick the money in their JISAs.

I also took out a 15 month 0% purchases Nationwide credit card today to stooze them while I build up a new 2.5% Club Lloyds regular saver to repay it in 12 months. Simple pleasures.

reefer37

the nationwide was a kick in the teeth as dropped more than the 0.65%
lucky i also use newbury building society which have dropped them by 0.15% at start of month then dropped them by 0.5% after base rate drop. so in total 0.65% which i feel is fair. so will be moving more to them.