Co-operate Bank - alternatives, please?

eskbanker

jbrassy said:
If you have lots of money parked in a zero interest current account, you are definitely losing out. You should move it to a savings account with a decent interest rate or a stocks and shares ISA.

Even so, everyone needs to keep some money in their current account for a short period of time to pay for bills etc. Banks can still profit from this by lending it out in the money markets overnight at low risk and make a small profit. Across their entire portfolio of customers, I imagine this is quite lucrative. 

Slightly off-topic, but airlines are another interesting example. You should never pay full price for business or first class seats on a flight. Economy seats on a flight are typically sold at a loss and are cross-subsidised by those flying business or first class where the airline makes juicy profit margins. You should only fly business or first class if someone else is paying (like your employer) or you pay using Avios points (or whatever loyalty points the airline uses). 

You seem very keen to tell people what they should do - it's perfectly legitimate for people to choose not to squeeze every penny from their capital, or for those lucky enough to be able to afford premium airline cabins to pay the extra, i.e. cheapest isn't always best, even though this is MSE....

[Deleted User]

jbrassy said:

Nebulous2 said:

RainbowsInTheSpray said:

MoJoeGo said:

RainbowsInTheSpray said:

MoJoeGo said:

 though is that if you were promised something 15 years ago and they delivered for at least 7-8 of those then that wasn't a bad result. In modern banking terms, 7-8 years is an eternity.

I expect light bulbs to last longer than that.

The retail banking sector in this country is an absolute joke. Why some government hasn't stepped in at some stage over the last twenty years is a mystery... or, more likely probably, the result of quiet Sunday morning golf club arm twisting at the nineteenth hole...

Meh... perhaps you do. Of course that one lightbulb doesn't have to constantly change how it operates due to ever evolving regulation (and the costs that go with it), but if that simplistic analogy serves its purpose, i.e. opening the floodgates for this thread to turn into a general rant about banks, then go right ahead.

Given that much of the world doesn't really have the concept of 'free' banking, be careful when you draw up your laundry list of service requirements. Whatever the right and wrongs of the Coop specifically, you may find you have to actually pay for what you want.

Unless of course you think that the banks owe everyone a 'hair-shirt' level act of contrition. Which isn't going to happen, and no government will ever force the issue.

MoJoeGo said:

RainbowsInTheSpray said:

MoJoeGo said:

 though is that if you were promised something 15 years ago and they delivered for at least 7-8 of those then that wasn't a bad result. In modern banking terms, 7-8 years is an eternity.

I expect light bulbs to last longer than that.

The retail banking sector in this country is an absolute joke. Why some government hasn't stepped in at some stage over the last twenty years is a mystery... or, more likely probably, the result of quiet Sunday morning golf club arm twisting at the nineteenth hole...

Meh... perhaps you do. Of course that one lightbulb doesn't have to constantly change how it operates due to ever evolving regulation (and the costs that go with it), but if that simplistic analogy serves its purpose, i.e. opening the floodgates for this thread to turn into a general rant about banks, then go right ahead.

Given that much of the world doesn't really have the concept of 'free' banking, be careful when you draw up your laundry list of service requirements. Whatever the right and wrongs of the Coop specifically, you may find you have to actually pay for what you want.

Unless of course you think that the banks owe everyone a 'hair-shirt' level act of contrition. Which isn't going to happen, and no government will ever force the issue.

But isn't it just fascinating how the simple act of asking for straightforward, honest dealing with a reasonable standard of customer service actually leads with great rapidity, in the case of British retail banks as with almost no other sector, to 'ranting'? I repeat that successive governments have let them off the hook, not held them to account and the resultant mess ensures that almost nobody is satisfied.

'Ever evolving regulation' is not the cause of the problem. Failure to invest in people and systems is. They'd rather, far rather, give money to the get-rich-quick shareholders.

I'm very, very far from being alone in my belief... I hear it shared by virtually everyone I meet, the mere mention of 'bank' being greeted by a weary roll of the eyes... 

Loyalty to a bank is often misplaced, particularly where they are no longer working for you. I was a longstanding Clydesdale bank customer and often recommended them to other people. After a complaint which they handled very badly I switched and have gone on a journey with multiple bank accounts, sign up bonuses, monthly rewards etc. I recently decided to reconsider Clydesdale and try them again, but they turned me down! 

That brings me to my main point however. The most astonishing thing about banks is how much they give us free of charge. Even thinking about a cash machine. They need to buy it, site it, maintain it and stock it. They need the back office functions and computers to monitor your bank balance and link to the cash machine. You go along, stick your card in, enter your pin and withdraw £100. That has cost the bank somewhere around £2-3 to get the money into your hand. How much has it cost you? 

Since the financial crash banks have been much more closely regulated, which has limited the ways they can raise money from their customers directly, but yet we still expect the same or better service. That's my main takeaway from banking- we are on a surprising streak, where they are providing a great deal of benefits and they cannot work out a way to get any money from me!

Even if banks are not charging you any fees for their services, they are still making money from you. Current accounts seldom pay any interest on balances. Therefore, when you put money into a current account, you are effectively lending the bank money at zero interest. They can subsequently lend this money out to their customers in the form of mortgages and loans which they subsequently profit from. 

Essentially, banks profit from current accounts by not paying any interest on balances. 

It's not that simple with QE/low interest rates, the value of current account balances is much reduced plus all funds are available on demand so not suited for mortgage or long-term investments.

If you notice, lots of the best deals now have a small fee attached (even if refunded) to lock-in usage. 

jbrassy

eskbanker said:

jbrassy said:
If you have lots of money parked in a zero interest current account, you are definitely losing out. You should move it to a savings account with a decent interest rate or a stocks and shares ISA.

Even so, everyone needs to keep some money in their current account for a short period of time to pay for bills etc. Banks can still profit from this by lending it out in the money markets overnight at low risk and make a small profit. Across their entire portfolio of customers, I imagine this is quite lucrative. 

Slightly off-topic, but airlines are another interesting example. You should never pay full price for business or first class seats on a flight. Economy seats on a flight are typically sold at a loss and are cross-subsidised by those flying business or first class where the airline makes juicy profit margins. You should only fly business or first class if someone else is paying (like your employer) or you pay using Avios points (or whatever loyalty points the airline uses). 

You seem very keen to tell people what they should do - it's perfectly legitimate for people to choose not to squeeze every penny from their capital, or for those lucky enough to be able to afford premium airline cabins to pay the extra, i.e. cheapest isn't always best, even though this is MSE....

Look, it's up to people what they do with their money. I'm only giving people advice. In fact, I'm happy if people want to pay full price for business class seats because, like I said, it allows all those who choose economy to benefit from cheaper tickets. Ultimately, you can lead a horse to water, but you can't make it drink. 

In any case, I thought the purpose of this website for to provide people with informal advice to save money? Otherwise, what's the point of all this? 

MoJoeGo

jbrassy said:

eskbanker said:

jbrassy said:
If you have lots of money parked in a zero interest current account, you are definitely losing out. You should move it to a savings account with a decent interest rate or a stocks and shares ISA.

Even so, everyone needs to keep some money in their current account for a short period of time to pay for bills etc. Banks can still profit from this by lending it out in the money markets overnight at low risk and make a small profit. Across their entire portfolio of customers, I imagine this is quite lucrative. 

Slightly off-topic, but airlines are another interesting example. You should never pay full price for business or first class seats on a flight. Economy seats on a flight are typically sold at a loss and are cross-subsidised by those flying business or first class where the airline makes juicy profit margins. You should only fly business or first class if someone else is paying (like your employer) or you pay using Avios points (or whatever loyalty points the airline uses). 

You seem very keen to tell people what they should do - it's perfectly legitimate for people to choose not to squeeze every penny from their capital, or for those lucky enough to be able to afford premium airline cabins to pay the extra, i.e. cheapest isn't always best, even though this is MSE....

Look, it's up to people what they do with their money. I'm only giving people advice. In fact, I'm happy if people want to pay full price for business class seats because, like I said, it allows all those who choose economy to benefit from cheaper tickets. Ultimately, you can lead a horse to water, but you can't make it drink. 

In any case, I thought the purpose of this website for to provide people with informal advice to save money? Otherwise, what's the point of all this? 

Agreed. It's a free world but I have to say it was a bit of a harsh comment...

Mind you, it's the apathetic, careless and feckless, that fund my banking perks (and for that matter, everything else in life that I haggle a good deal on...) so maybe we shouldn't go out of our way to kill that golden goose...

eskbanker

jbrassy said:

eskbanker said:

jbrassy said:
If you have lots of money parked in a zero interest current account, you are definitely losing out. You should move it to a savings account with a decent interest rate or a stocks and shares ISA.

Even so, everyone needs to keep some money in their current account for a short period of time to pay for bills etc. Banks can still profit from this by lending it out in the money markets overnight at low risk and make a small profit. Across their entire portfolio of customers, I imagine this is quite lucrative. 

Slightly off-topic, but airlines are another interesting example. You should never pay full price for business or first class seats on a flight. Economy seats on a flight are typically sold at a loss and are cross-subsidised by those flying business or first class where the airline makes juicy profit margins. You should only fly business or first class if someone else is paying (like your employer) or you pay using Avios points (or whatever loyalty points the airline uses). 

You seem very keen to tell people what they should do - it's perfectly legitimate for people to choose not to squeeze every penny from their capital, or for those lucky enough to be able to afford premium airline cabins to pay the extra, i.e. cheapest isn't always best, even though this is MSE....

Look, it's up to people what they do with their money. I'm only giving people advice. In fact, I'm happy if people want to pay full price for business class seats because, like I said, it allows all those who choose economy to benefit from cheaper tickets. Ultimately, you can lead a horse to water, but you can't make it drink. 

In any case, I thought the purpose of this website for to provide people with informal advice to save money? Otherwise, what's the point of all this? 

Just to be clear, my comment was more about style than content - as you say, highlighting ways of saving money or minimising spend is very much what this site is about, but the repeated references to 'you should' without qualification came across as quite a hectoring tone.

Personal preference perhaps, but I'd have used terminology more like 'moving money from a current account to savings or investments is likely to achieve a better return' or 'I don't think that premium airline tickets are usually good value for money'....