why are the banks giving freebies?

cattom

Wonder why the banks have decided to go down the 'go with us for free cash' route. there are several at the moment- virgin money, hsbc, first direct. I remember a few years ago this sort of thing was all the rage, then it died out. maybe it just takes one to do something and the others follow suit.

dunstonh

Incentives exist to buy market share and improve brand recognition.
With banks operating on reduced capacity, they don't really want to open branch based accounts at this time 

Zanderman

cattom said:

Wonder why the banks have decided to go down the 'go with us for free cash' route. there are several at the moment- virgin money, hsbc, first direct. I remember a few years ago this sort of thing was all the rage, then it died out. maybe it just takes one to do something and the others follow suit.

It's never 'died out' - these offers are almost constant, a few months off now and then, but not for long.
The bank account part of the forum (not this part, which is savings) is constantly reporting these.
They're trying to increase their customer base, that's all. 
Even if they have to pay people to do it. 
Just go with the flow and relaxxxxx. 
Don't ask why.
(and, btw, the Virgin offer isn't free cash, it's free booze)

Wheres_My_Cashback

cattom said:

Wonder why the banks have decided to go down the 'go with us for free cash' route. there are several at the moment- virgin money, hsbc, first direct. I remember a few years ago this sort of thing was all the rage, then it died out. maybe it just takes one to do something and the others follow suit.

Loss Leaders.

Banks more than ever need funds now and this is a great way of getting it. Entice the customer with cashback, get them onboard, sell other products to them and there you have it, snared!

Of course a very small savvy percentage will take the money and run, but the vast majority will not.

cattom

Zanderman said:

cattom said:

Wonder why the banks have decided to go down the 'go with us for free cash' route. there are several at the moment- virgin money, hsbc, first direct. I remember a few years ago this sort of thing was all the rage, then it died out. maybe it just takes one to do something and the others follow suit.

It's never 'died out' - these offers are almost constant, a few months off now and then, but not for long.
The bank account part of the forum (not this part, which is savings) is constantly reporting these.
They're trying to increase their customer base, that's all. 
Even if they have to pay people to do it. 
Just go with the flow and relaxxxxx. 
Don't ask why.
(and, btw, the Virgin offer isn't free cash, it's free booze)

yes I'm aware its free booze for virgin money. its virgin money that I've moved my current account to. I was thinking maybe all this stuff was a sign of the economy about to recover. what ever.

jimjames

cattom said:

Wonder why the banks have decided to go down the 'go with us for free cash' route. there are several at the moment- virgin money, hsbc, first direct. I remember a few years ago this sort of thing was all the rage, then it died out. maybe it just takes one to do something and the others follow suit.

It's never died out. Some of us may have been unable to take part as we've already had the offers but the opportunities have been there pretty consistently for different banks

singhini

cattom said:

s a sign of the economy about to recover. what ever.

Not sure about that. i read on Starling Bank's website that some of their accounts attract a negative interest rate (They have introduced a negative interest rate of -0.5% AER on their Euro personal current accounts for people holding anything above €50,000 from 1st November 2020). So if you hold €51,000 they will apply the -0.5% on €1,000
The rest of the text said something like it will bring the bank inline with the negative interest rates on deposits in force throughout the Eurozone
 i appreciated most people / alot of people don't hold €uros let alone €50,000+ but its an example of a bank levying negative interest rate.
the worry is if there is a bigger downturn across Europe and we start to see this elsewhere i.e. UK on £ sterling accounts ? 

singhini

Found the screenshot from yesterday:

colsten

singhini said:

The rest of the text said something like it will bring the bank inline with the negative interest rates on deposits in force throughout the Eurozone

It is not the case that all banks in the Eurozone are charging negative interest for deposits > 50,000 Euros. Some do, some don't. Some which charge have different clipping levels. Many have paid near-zero, or even zero, interest for some time.

singhini

colsten said:

It is not the case that all banks in the Eurozone are charging negative interest

I agree   (i was mealy typing what was said in the screenshot i attached)

maxsteam

cattom said:

Wonder why the banks have decided to go down the 'go with us for free cash' route.

It's one way for a bad bank to get new customers.