What is wrong with Savings companies?

jaypers

Really don’t understand why it takes so long for many of the savings institutions to react to the Base Rate increases. Marcus immediately springs to mind. They used to be market leading, but currently they are incredibly uncompetitive. Started moving my savings out, when a simple matching increase would have meant I wouldn’t have bothered. They must be losing a lot of business. Perhaps they don’t care? 

Charter Savings Bank are another institution that disappoints me now. Their products are currently pants!!

Rant over! 

eskbanker

jaypers said:

Really don’t understand why it takes so long for many of the savings institutions to react to the Base Rate increases.

Why do you expect them to react to base rate changes?  They're not obliged to (except those offering tracker products, not that there are many, if any, of those just now) so many choose not to....

jaypers

eskbanker said:

jaypers said:

Really don’t understand why it takes so long for many of the savings institutions to react to the Base Rate increases.

Why do you expect them to react to base rate changes?  They're not obliged to (except those offering tracker products, not that there are many, if any, of those just now) so many choose not to....

Surely they want our savings in order to invest and make a profit? Surely being uncompetitive puts them at a disadvantage as people will move their savings elsewhere?? Or is it a case that the majority don’t notice/don’t care and piles of cash continues to sit in these accounts at crappy rates??? 

eskbanker

jaypers said:

eskbanker said:

jaypers said:

Really don’t understand why it takes so long for many of the savings institutions to react to the Base Rate increases.

Why do you expect them to react to base rate changes?  They're not obliged to (except those offering tracker products, not that there are many, if any, of those just now) so many choose not to....

Surely they want our savings in order to invest and make a profit? Surely being uncompetitive puts them at a disadvantage as people will move their savings elsewhere?? Or is it a case that the majority don’t notice/don’t care and piles of cash continues to sit in these accounts at crappy rates??? 

Outside the MSE bubble, many millions of people save money without constantly chasing around after the best rates, and that inertia is indeed what many savings providers count on, although they know what their deposit levels are and can choose to flex rates if they see any evidence of becoming uncompetitive.

intalex

Probably not enough outflows from the non-competitive providers... hence no incentive to react to competition!!

System might work better for savers, if savers reacted swiftly...

Bigwheels1111

Vote with your feet and move, I went from Marcus to Ford Money to Tandem and now Chase all in 3 weeks I think it was.
I’m hoping for a few more increases before August when one of my fixed rates ends, then September for another.
I will look around and take the best deal.

Thrugelmir

Financial institutions need the deposits for a purpose. They don't offer marketing leading rates for no purpose. 

Marcus cannot afford to grow any larger. As it will result in them falling into a different tier of regulation. They tapped the market for the amount they needed to raise. 

ranciduk

Thrugelmir said:

 As it will result in them falling into a different tier of regulation.  

What does this mean in layman’s terms?

jimjames

jaypers said:

eskbanker said:

jaypers said:

Really don’t understand why it takes so long for many of the savings institutions to react to the Base Rate increases.

Why do you expect them to react to base rate changes?  They're not obliged to (except those offering tracker products, not that there are many, if any, of those just now) so many choose not to....

Surely they want our savings in order to invest and make a profit? 

If inertia means people don't move their savings then they will make more profit by not increasing rates until they need to. Most people won't bother moving for 0.1% difference, I'm sure Marcus and others know exactly how to price it to keep the deposits that they need.

Thrugelmir

ranciduk said:

Thrugelmir said:

 As it will result in them falling into a different tier of regulation.  

What does this mean in layman’s terms?

Called ringfencing. When a bank has more than £25 billion of assets UK banks are required by UK law to separate core retail banking services from their investment and international banking activities. 

Albermarle

intalex said:

Probably not enough outflows from the non-competitive providers... hence no incentive to react to competition!!

System might work better for savers, if savers reacted swiftly...

There is this, but also it depends on their need for money . If their borrowing has slowed down and/or they can raise money easily in other ways , then why offer higher interest rate to savers.