What Building Societies (and Niche Banks) to hold to for access to member only accounts

someone

I know what most high-street banks offer as existing customer deals but less so the occasional and limited issue deals offered by many Building Societies (and I guess niche Banks). It would great to "crowdsource" which institutions are worth opening an account with in order to access these deals if/when they appear. You could think of this as "Carpetbagging" but for the purpose of member benefits instead of a sell off bonus.

What "intel" have people picked up over the years? Which less well know institutions always seems to have a great ISA (only for existing members) during ISA season? Who has launched a Christmas Saver  (only for existing members) every year with a good rate? etc.

cricidmuslibale

I think you can now put Saffron Building Society into the category of those institutions which has just launched a members only regular saver shortly before Christmas with a good rate (in today's very low interest rate environment) of 1.5%. You have to have had an account with Saffron for at least a year to be eligible to apply; thus many savers won't be able to access this account which is obviously a pity for many regular saver fans like me who are now desperately scrambling for a half decent interest rate.

msallen

cricidmuslibale said:

I think you can now put Saffron Building Society into the category of those institutions which has just launched a members only regular saver shortly before Christmas with a good rate (in today's very low interest rate environment) of 1.5%. You have to have had an account with Saffron for at least a year to be eligible to apply; thus many savers won't be able to access this account which is obviously a pity for many regular saver fans like me who are now desperately scrambling for a half decent interest rate.

I'm surprised you haven't started your campaign yet to make this illegal and force all organisations to operate how best suits you.

JamesRobinson48

someone said:

I know what most high-street banks offer as existing customer deals but less so the occasional and limited issue deals offered by many Building Societies (and I guess niche Banks). It would great to "crowdsource" which institutions are worth opening an account with in order to access these deals if/when they appear. You could think of this as "Carpetbagging" but for the purpose of member benefits instead of a sell off bonus.

What "intel" have people picked up over the years? Which less well know institutions always seems to have a great ISA (only for existing members) during ISA season? Who has launched a Christmas Saver  (only for existing members) every year with a good rate? etc.

In the case of building societies, I feel the tactic you're contemplating would be likely to generate very slim pickings, especially compared with the 'carpetbagging' bonanza of yore. Besides the current Regular Saver (RS) from Saffron BS, all I can think of lately is the following:

* Cambridge BS has a 3% Loyalty RS, but the max is only £100pm for a year.
* Chorley BS typically offers slightly higher interest on rolling over a maturing RS than would be available to new applicants.
* Nottingham BS used to offer existing members (of one year's standing) a fractionally higher interest rate on an RS with indefinite term.
* Mansfield BS accepts applications for its RS from 'local and loyal' customers, where 'loyal' means existing members of one year's standing.
* Newbury BS has an 'existing members account' paying slightly more than its 'welcome to Newbury' account for new customers.
* Earl Shilton BS periodically shuts off its entire savings product range other than to applicants who are either local or existing members.

Generally I make a point of never terminating all of my savings accounts with any BS, so that I would always apply for any new product as an 'existing member'.  But I don't think I would ever bother to join a BS merely on the off chance of gaining member benefits in the future.

ColdIron

someone said:

Which less well know institutions always seems to have a great ISA (only for existing members) during ISA season

ISA season? My old grandpa used to talk about that

someone

ColdIron said:

ISA season? My old grandpa used to talk about that

Yes, far more muted in recent years. A slight uptick instead of a spike. Off topic for this thread but my observations have been;

• ISAs overall have become much more complex with the introduction of multiple types (we now have Cash ISAs, S&S ISAs, Help to Buy ISAs, Lifetime ISAs, Innovative Finance ISAs) along with the fact these can be Flexible ISAs or not.
  
• The interesting product launches with good rates have been really around the Help to Buy ISAs and subsequent Lifetime ISAs both capable of generating gains far grater than what those who max out an allowance each year.
  
• Accumulated ISA balances now mean banks are less likely to offer great ISA rates as "marketing" for cross selling. This is a combination of removing separate Cash and S&S caps as well as higher annual limits.  Note that recent "best rates" tended to be on those accounts the ISA product imposed restrictions on annual subscriptions to modest amounts; LISA £4k/year, Help to Buy ISA £3k/year (@250/month).
  
• Before everyone who paid income tax had a reason to use an ISA. Now that blanket benefit does not apply due to the personal savings allowance (PSA) resulting in those who benefits form an ISA is really fragmented. A non exhaustive list of those that it might work out better for them; Higher rate tax payers (if they get > £500 /year in savings interest), all additional rate taxpayers, those exceeding the PSA (but not those who all their savings income will benefit from the "Starting rate for savings" and/or their personal allowance (different to the PSA)), those with Student Loan who have entered repayment who have "non earned income" (interest, dividends etc.)  over £2,000. It is now far more about your individual circumstances and needing to work out just how much an ISA offers you this year and and in the future! Much more difficult to stick that on a poster in branch!

ISAs ain't dead, just more complex. The irony ISAs had been intended to simplify TESSAs/PIPs (there are before my age) but may have ended up like this! Reform via replacement is probably due but some of the most recent additions (e.g. LISAs) make that far more difficult and the chancellor of exchequer has far more pressing matters to attend to at the moment. One other point is they are more accessible to those with less savings but at the same time less useful to those same people, either directly (nil benefit from tax treatment) or indirectly ("marketing" rates no longer viable due to limit changes etc.).

cricidmuslibale

msallen said:

cricidmuslibale said:

I think you can now put Saffron Building Society into the category of those institutions which has just launched a members only regular saver shortly before Christmas with a good rate (in today's very low interest rate environment) of 1.5%. You have to have had an account with Saffron for at least a year to be eligible to apply; thus many savers won't be able to access this account which is obviously a pity for many regular saver fans like me who are now desperately scrambling for a half decent interest rate.

I'm surprised you haven't started your campaign yet to make this illegal and force all organisations to operate how best suits you.

Well if you knew me a lot better than you clearly do then you would realise that I'm very very rarely into making things illegal and I certainly don't believe in forcing organisations to operate how best suits me (or indeed anyone else for that matter)! It's only in two cases: (a) the national minimum wage which I fully support to prevent the lowest paid being on ridiculously low sweatshop wages and (b) my proposed national minimum interest rate of 0.5% for fixed rate savings in order to protect those who rely partly on savings to pay the bills - where I believe it is the right thing to do for the Government to set legal minimums in this way.

colsten

cricidmuslibale said:

 (b) my proposed national minimum interest rate of 0.5% for fixed rate savings in order to protect those who rely partly on savings to pay the bills - where I believe it is the right thing to do for the Government to set legal minimums in this way.

You seriously want those who have tens of thousands* in the bank to be subsidised by the banks, when at the same time those who have no savings may have to go begging for means-tested benefits? Doesn't sit right with me, I'm afraid.

* if they don't have tens of thousands, there's no meaningful sum of money to be earned from 0.5% AER, anyway

Zanderman

cricidmuslibale said:

msallen said:

cricidmuslibale said:

I think you can now put Saffron Building Society into the category of those institutions which has just launched a members only regular saver shortly before Christmas with a good rate (in today's very low interest rate environment) of 1.5%. You have to have had an account with Saffron for at least a year to be eligible to apply; thus many savers won't be able to access this account which is obviously a pity for many regular saver fans like me who are now desperately scrambling for a half decent interest rate.

I'm surprised you haven't started your campaign yet to make this illegal and force all organisations to operate how best suits you.

Well if you knew me a lot better than you clearly do then you would realise that I'm very very rarely into making things illegal and I certainly don't believe in forcing organisations to operate how best suits me (or indeed anyone else for that matter)! It's only in two cases: (a) the national minimum wage which I fully support to prevent the lowest paid being on ridiculously low sweatshop wages and (b) my proposed national minimum interest rate of 0.5% for fixed rate savings in order to protect those who rely partly on savings to pay the bills - where I believe it is the right thing to do for the Government to set legal minimums in this way.

You're forgetting your suggestion for how NS&I should run Premium Bond prizes.

You do seem to view savings purely from the consumer entitlement viewpoint.  But the world doesn't - and probably won't ever - work like that.  Banks are not charities or social services, they're businesses.

The only financial institutions set up for the consumer are the credit unions and the few remaining true building societies - but a quick look at those and you'll find their interest rates are mostly even more dire than the banks.  That's the real world.  Interest rates above the minimum are loss-leading products trying to attract other, longer-term, profitable custom.  That's all.  Banks are never going to subsidise people!  It's like asking Tesco to give you free food all the time.  The C Unions etc show the reality of social banking - where decent interest is unaffordable.

Minimum wage is another matter entirely.
.

cricidmuslibale

"You seriously want those who have tens of thousands* in the bank to be subsidised by the banks, when at the same time those who have no savings may have to go begging for means-tested benefits? Doesn't sit right with me, I'm afraid."

"* if they don't have tens of thousands, there's no meaningful sum of money to be earned from 0.5% AER, anyway"

The banks could easily afford a minimum interest rate of 0.5% for fixed rate savings without this affecting any of their profit margins or shareholder returns etc. All they would need to do is to raise their mortgage fixed interest rates by the very small amount needed to allow for a minimum 0.5% fixed savings interest rate. E.g. HSBC UK is currently paying fixed savings rates of 0.30%-0.35%. It could very easily raise these by 0.2%-0.15% simply by raising its mortgage fixed interest rates by the same percentages.

A lot of older people especially currently have tens of thousands (but usually not many hundreds of thousands) in the bank earning virtually no interest because, totally understandably, they are unwilling to risk their life savings on much riskier investments. They often need savings interest to add to what they get from their state pension (which is not usually enough on its own) in order to simply pay the day-to-day living expenses. (It is a lot more expensive when you are older and have extra health costs!) My minimum fixed interest rate proposal provides a necessary floor so that older people don't have to seriously eat into their savings capital, which can cause them a great deal of upset in thinking that they are losing their life savings, in order to add enough money to what they get from their pension so that they can afford to live a reasonably comfortable life.

A total of £90,000 in life savings even at only 0.5% AER, which remember would be the legal minimum fixed interest rate - banks and building societies would be entirely free to offer any higher interest rate than this if they chose so to do - provides a monthly income of £37.50 or an annual income of £450. That may not seem much on its own but add this to the current state pension amount - which in full is only £175.20 per week and not all pensioners by any means receive the full weekly amount - and it could make a real difference between an older person being able to afford that very necessary extra cost of living and not being able to!

[Those who have no savings and have to rely on means-tested benefits is an entirely separate issue which is all about them not being able to get enough paid work, or income from what paid work they are able to do, to afford their day-to-day living costs. This situation can be made less worse than it currently is by there being a real National Living Wage which takes into account the true cost of living and the Government incentivising as many job creation schemes, especially green ones, as they reasonably can. Also, for those who really do genuinely rely on them simply to live from day-to-day, means tested benefits should be generous enough and easily enough obtainable to make sure these people do not e.g. starve, resort to begging or become homeless!] 

cricidmuslibale

"You're forgetting your suggestion for how NS&I should run Premium Bond prizes."

"You do seem to view savings purely from the consumer entitlement viewpoint.  But the world doesn't - and probably won't ever - work like that.  Banks are not charities or social services, they're businesses."

"The only financial institutions set up for the consumer are the credit unions and the few remaining true building societies - but a quick look at those and you'll find their interest rates are mostly even more dire than the banks.  That's the real world.  Interest rates above the minimum are loss-leading products trying to attract other, longer-term, profitable custom.  That's all.  Banks are never going to subsidise people!  It's like asking Tesco to give you free food all the time.  The C Unions etc show the reality of social banking - where decent interest is unaffordable."

"Minimum wage is another matter entirely."

My suggestion for how NS&I should run Premium Bond prizes is exactly that, a suggestion, there's no element whatsoever of forcing going on here!

Of course banks, and most building societies now, are businesses, not charities or social services, virtually everyone knows that including me! However that in no way whatsoever prevents them from raising their fixed mortgage rates by a very small percentage to allow for a minimum fixed savings interest rate of 0.5% AER, which, remember, in anything like normal times would be thought of as a very low interest rate indeed!

Nobody, least of all me, is asking banks to subsidise people! If you look up the true definition of 'subsidise' you will see that you have misused that term in this situation. Banks and building societies providing a bare minimum fixed savings interest rate of 0.5% through ensuring that mortgage interest rates, and in particular fixed mortgage interest rates, are if necessary raised very slightly from where they are now simply helps to redress the balance between mortgage payers and savers, which at the moment is a little too much in favour of the former at the expense of the latter!