Government is asking banks to up savings interest rates and be fair?

boingy

Govt: "Now look here, Banks. You've jolly well got to increase your rates more quickly.
Banks: "Yes, we agree. We'll get right on with starting to think about maybe looking at it."

Govt press release "Govt orders banks to play fair".

AstonSmith

Rob5342 said:

Anyone can look on becleverwithyourcash and find 16 easy access savings accounts with interest rates greater than 4%. Why should the banks increase the interest rates for people that are happy with having a low rate?

What makes you think they're happy with the low rates? I want 4%+.

As long as banks can choose who they open accounts for, with catches like having a hard-credit-checked linked current account, not everyone can have those higher rates.

Zanderman

AstonSmith said:

Rob5342 said:

Anyone can look on becleverwithyourcash and find 16 easy access savings accounts with interest rates greater than 4%. Why should the banks increase the interest rates for people that are happy with having a low rate?

What makes you think they're happy with the low rates? I want 4%+.

As long as banks can choose who they open accounts for, with catches like having a hard-credit-checked linked current account, not everyone can have those higher rates.

There are plenty of 4%+ savings accounts available that don't need a specific current account. For example:

UBL (4.16% )

GB Bank (Raisin 4.15%)

Secure Trust Bank (4.15%)

Cynergy Bank (4.12%)

Brown Shipley (Raisin 4.11%)

Oxbury Bank (4.11% )

Tandem (4.1% )

Family Building Society Online Saver (4.35%)

Yorkshire Building Society Internet Saver Plus (4.25% )

Chip (4.21% 

Investec (4.2% )

Leeds Building Society (4.2%)

Monument Bank (4.2%)

RCI Freedom Savings Account (4.2%)

And that's just easy access ones. You need to look a bit harder!

Rob5342

RogerPensionGuy said:

sevenhills said:

It's just the Government playing at politics. NI have low rates too, isn't that owned or influenced by the Government?
Whether it be banks or supermarkets, there is ample competition, Government interference is not needed.

It's very easy for some people in society to move savings around in a jiffy getting the best deals on offer but, many people are scared of all the security issues possibilities or just don't have the technical ability to use computers, phones or the Internet in general.

You dont need any technical ability, just the ability to read and write. If you want to find a good savings account then all you have to do is type "best savings account", then the first link mentions yorkshire building which has a few accounts including some that can be opened in a branch or online.

If someone can't cope with that then they will be unable to cope with all sorts of things, and it's impractical to expect everyone to cater for them in every possible way. It would be like expecting the guard on a train to go through and ask everyone if they knew it was lunchtime and had something to eat as there are some people that can't remember. 

Rob5342

AstonSmith said:

Rob5342 said:

Anyone can look on becleverwithyourcash and find 16 easy access savings accounts with interest rates greater than 4%. Why should the banks increase the interest rates for people that are happy with having a low rate?

What makes you think they're happy with the low rates? I want 4%+.

As long as banks can choose who they open accounts for, with catches like having a hard-credit-checked linked current account, not everyone can have those higher rates.

My credit report is in a pretty bad state but I've never had any problem opening savings accounts. I haven't been able to get the absolute best but with 15 minutes of effort I've got some reasonable rates.

Eco_Miser

Rob5342 said:

RogerPensionGuy said:

sevenhills said:

It's just the Government playing at politics. NI have low rates too, isn't that owned or influenced by the Government?
Whether it be banks or supermarkets, there is ample competition, Government interference is not needed.

It's very easy for some people in society to move savings around in a jiffy getting the best deals on offer but, many people are scared of all the security issues possibilities or just don't have the technical ability to use computers, phones or the Internet in general.

You dont need any technical ability, just the ability to read and write. If you want to find a good savings account then all you have to do is type "best savings account", then the first link mentions yorkshire building which has a few accounts including some that can be opened in a branch or online.

If someone can't cope with that then they will be unable to cope with all sorts of things, and it's impractical to expect everyone to cater for them in every possible way. It would be like expecting the guard on a train to go through and ask everyone if they knew it was lunchtime and had something to eat as there are some people that can't remember. 

You do actually need the technical ability to operate an internet connected device, and access to such a device.

Just reading and writing isn't enough. Nor is typing if you use a typewriter.

Further, finding a suitable account is just the first hurdle, opening it, and passing the identity checks are further hurdles. RogerPensionGuy was pointing out that not everyone can cope with following the highest rates, for a variety of reasons, and you haven't refuted that, just come up with a ridiculous comparison.

FFHillbilly

in my opinion the proposed rules are just a step too far, too much regulation. too much regulation isn't always good for businesses

pridehappy

I do believe banks should be regulated and 'forced' to increase interest rates to an adequate minimum set by the government (for example, might be 2% AER minimum) and would ensure even those more vulnerable who are unable to switch savings easily would still benefit from rising interest rates.

Virgin Money seems to be one of the best high-street providers to ensure interest rates are good, although I'm sure this is one of the pull reasons. 3.03% on instant access up to £25,000 and 5.15% AER on a 2-year fixed Cash ISA is amazing. Sure, not the highest rate out there, although for those who prefer to save with high-street names (including myself), not a bad offer. 

Nationwide already stated in their annual report they are going to be focusing this year on raising interest rates, let's just hope they do. At the moment, they definitely aren't the worst, but just slightly behind Virgin Money. 

boingy

In a perfect world we'd only need one account - a current account that pays a competitive rate of interest and has unlimited FSCS protection. Back in the real world we should be grateful, in a way, that there are so many people with savings sitting at dreadful rates. If they all suddenly decided to jump on the best rates each month then the best rates would be nowhere near as good. 

Zanderman

I'm not sure why anyone thinks banks have some sort of duty to track interest rates and pass them on, especially the additional expectation that this should be done rapidly.

Banks aren't a public service - they're not public bodies, or local authorities, they're not even utility companies. They're simply businesses that exist primarily to make money, not to please the public. Pleasing the public helps gain and retain customers, so they all try to please the public to a greater or lesser extent, but that's only a means to an end of making profit.  It makes them seem as if they're there for us - but frankly it's more like we're here for them.

If they can keep at least some customers despite offering lower than current interest rates then they're doing good business. If those customers are staying because they will not or cannot change banks then that isn't really (sorry!) that bank's problem.

You don't have to like it of course.  But this is no different to a retailer that sells you a loaf of bread for £1.90 when you can get the exact same loaf at another shop for £1.50.  If the £1.90 shop is more convenient for you then you'll probably go there. If you can take a bit of trouble - walk or drive further and get the £1.50 version you've spent less. But it's more hassle, and might even be completely impractical for you. 

Or the petrol station that charges £1.70 a litre versus the one that charges £1.40 a litre. The £1.70 one may be the most convenient - maybe with longer hours or proximity to other shops you want to go to.  The £1.40 one may close early and be out in the sticks. 

It's all about choice - but also, critically, about convenience and how much hassle you're prepared to go to to get the best deal. 

And yes, as some are pointing out, not everyone is in a position to make the choice or to get the best deal with banks.

Nothing new there though. Differing banks and building societies have always had differing rates and differing response to in BoE rates. Before the advent of the internet you wouldn't even know about most of them.  Especially the smaller banks' offerings. We're actually spoilt for choice these days - but seem amazingly ungrateful for it!.

The range of choice available is huge, and yes, it's not always 'fair' but that's life - particularly in a capitalist economy!

We wouldn't expect the Government to announce that that particular loaf cannot be sold for more then £1.50 would we?  So why expect the Government to tell banks how to set interest rates?

And, last point (honest), if we really were all looked after financially through philanthropic government regulation, what would be the point of this part of the forum?