Marcus increases rates before BOE announcement

RG2015

jak22 said:

This thread is about Marcus as a savings brand and the timing of its increase just before the BoE announcement, and not the 'big 4'.

Of course there's an expectation of savings rates in general to increase as the BoE rate increases. That expectation is reflected in the wording of emails sent out by banks & building societies today and in news articles here and on other websites. But that doesn't mean it's expected a given bank will always increase immediately after and by the same amount as a BoE raise.

It doesn't take long for an account that was once popular, offering a rate at the top of league tables when that suits them, to fall behind. Each month's delay to pass on a 0.3% increase is a loss of £10 for every £40000 invested.

You make some valid points but I do question the piece that I have highlighted.

There is no requirement to pass anything on and there is no loss to anyone if they move their savings as soon as a better rate becomes available elsewhere.

I moved my money out of Marcus as soon as they ceased to offer a competitive rate. I couldn't care less about their behaviour or their timing.

Therefore what I really mean to say is that I don't understand why anyone would be annoyed with them.

eskbanker

RG2015 said:

I don't understand why there is an expectation of savings rates being increased when the BoE increases the base rate.

I'll recycle my answer from when you asked this last month!

eskbanker said:

Because there seems to be a widespread perception that institutions cut savings rates when the base rate drops?

https://forums.moneysavingexpert.com/discussion/6380478/bank-of-england-base-rate/p1

RG2015

eskbanker said:

RG2015 said:

I don't understand why there is an expectation of savings rates being increased when the BoE increases the base rate.

I'll recycle my answer from when you asked this last month!

eskbanker said:

Because there seems to be a widespread perception that institutions cut savings rates when the base rate drops?

https://forums.moneysavingexpert.com/discussion/6380478/bank-of-england-base-rate/p1

Thank you. 

I have the unfortunate habit of repeating myself. In truth, I know why the BoE rate is linked with banks’ interest rates. But I also know how banks operate.

I just get annoyed when people complain when banks behave like, er banks.

Then I complain when posters behave like, er posters.

Guess I have been hoist by my own petard. 

isasmurf

I am sure Marcus wants to diversify beyond easy access accounts and their rather low key fixed rate account. To be able to expand their product range they are going to need to reduce the deposits held in their existing products to create some headroom for those new products while staying under the regulatory limit. So it is not surprising they are not keeping up with the 'best buy' rates

Furthermore, they appear to have a policy to pay the same rate on the easy access account as their ISA. So the timing and size of increases on the easy access account will be affected by where it places their ISA in the market. It is only in the last week that an increase to todays rate could have been made without them being the market leader for easy access ISAs.

RG2015

Daliah said:

jak22 said:

This thread is about Marcus as a savings brand 

We'd have dozens of threads if each savings brand had its own thread. If Marcus were still the market leader, or at least amongst the top three, I could just about understand why people are still interested. They haven't been tops in over 4 years now, so what keeps you interest in them going?

Marcus only launched in the UK on 27 September 2018 with a market leading rate.

Do you know when they were overtaken and by whom? At best it would have been slightly less than 4 years ago.

https://www.moneysavingexpert.com/news/2018/09/new-online-bank-makes-its-marcus-with-top-savings-rate/