Sainsbury’s Bank not automatically applying interest rate rises

sgaske57

Has anyone else been caught out by Sainsbury’s Bank only applying interest rate rises to existing variable rate cash ISAs if you contact them and ask them to do so. They do not do it automatically. Interestingly you don’t have to contact them for a reduction in the interest rate to be applied, they manage to do that automatically. Surely this can’t be right? If it’s legal then it’s amoral. Any thoughts anyone. This needs publicising more

MX5huggy

No I think you have the wrong end of the stick. 

0.76% up to £499 1.3% over. 

sgaske57

Thanks MX5huggy but the bank have told me this is the case. My account is showing 0.35% whilst their website shows the same account with an interest rate of 1.3%. When I contacted the bank they said they only apply interest rate rises to these accounts if the account holder contacts the bank to ask for the new rate to be applied.

eskbanker

They apply different rates according to when the account was opened, rather than adjusting the rate on existing ones:

https://www.sainsburysbank.co.uk/savings/support/support_cashisa

so if you open one now you get 1.3% but if you opened one before then it'll retain a lower rate.

What automatic reductions have been applied to your account, i.e. what was the path to 0.35%?

NameWithheld

sgaske57 said:

Has anyone else been caught out by Sainsbury’s Bank only applying interest rate rises to existing variable rate cash ISAs if you contact them and ask them to do so. They do not do it automatically. Interestingly you don’t have to contact them for a reduction in the interest rate to be applied, they manage to do that automatically. Surely this can’t be right? If it’s legal then it’s amoral. Any thoughts anyone. This needs publicising more

It is being publicised more. Today in fact, in The Guardian.


https://www.theguardian.com/money/2022/aug/16/sainsburys-and-virgin-money-have-failed-to-pass-on-savings-rate-rises?CMP=Share_AndroidApp_Other

sgaske57

Thanks eskbanker. When I spoke to the bank yesterday they said they would change the rate to 1.3% from the day I spoke to them. When I originally opened the account the rate was 1.17%, I’m not sure what the path to 0.35% was but it has been at 0.35% for a couple of years.  This is the “note” that now appears on my account…”If you already have an existing Cash ISA with us please log onto your online banking to send us a secure message or call us and we can change the rate for you”.  I guess the easy solution is to move my money to a bank that applies interest rates automatically but this practice seems amoral to me on a variable rate account - I thought that was the point of this type of account 🤷‍♀️

isasmurf

I don't know why Sainsburys keeps getting the brunt of this criticism on here when the majority of banks operate this practice. 

But be careful what you wish for.  Remember the FCA's solution to this 1st world problem which they abandoned due to covid is to reduce everyone's interest rate after 1 year to a single rate for the bank.  You can guarantee,  for most banks, it will be low.