Metro Bank

boingy

friolento said:

scubado2 said:

I'm not sure that it even offers the best rate.  The (no longer available) Santander one offered 5.20% AER, as does Ulster Bank at the time of writing this.

Metro advertises 5.22% AER which equates to 5.10% gross, however within my account I found that the app quotes the rate as 5.10% AER (which would equate to a considerably less attractive 4.98% gross).  I don't know if this is a typo by whoever set the app up, but frankly I'm wary of trusting a bank capable of such a glaring error and my funds are now back to the safety of Santander and Ulster.

5.1% wouldn't be an error if it represented the gross rate - which it is. Interest is paid monthly @ 5.1% and compounds to 5.22% if you leave the interest in the account.

It's definitely an error in the app. Probably a typo by a developer. The app says "5.10% AER". The online/browser account just says "5.10%".

I tried to report it in the chat but it just wants me to phone them up. They need a "report a bug" option.

masonic

RedImp_2 said:

Just perusing options for a 1 year fix, but got me thinking of a hypothetical question on protection when looking at Metro Bank.  Say you had £80k invested in a 1 year bond and interest paid annually.  If in the unlikely event of them going belly up 9 months into the term, is it the £80k protected or would you potentially be covered for 75% of the annual interest earned as well?

If you don't exceed the FSCS limit, you would be covered for 100% of the interest earned, and possibly 100% of the interest payable to term if you were allowed to hold to term.

RedImp_2

masonic said:

RedImp_2 said:

Just perusing options for a 1 year fix, but got me thinking of a hypothetical question on protection when looking at Metro Bank.  Say you had £80k invested in a 1 year bond and interest paid annually.  If in the unlikely event of them going belly up 9 months into the term, is it the £80k protected or would you potentially be covered for 75% of the annual interest earned as well?

If you don't exceed the FSCS limit, you would be covered for 100% of the interest earned, and possibly 100% of the interest payable to term if you were allowed to hold to term.

I know it’s a pretty unlikely scenario but I was thinking if the interest was due to be paid annually so hadn’t been paid yet so the answer is possibly 

masonic

RedImp_2 said:

masonic said:

RedImp_2 said:

Just perusing options for a 1 year fix, but got me thinking of a hypothetical question on protection when looking at Metro Bank.  Say you had £80k invested in a 1 year bond and interest paid annually.  If in the unlikely event of them going belly up 9 months into the term, is it the £80k protected or would you potentially be covered for 75% of the annual interest earned as well?

If you don't exceed the FSCS limit, you would be covered for 100% of the interest earned, and possibly 100% of the interest payable to term if you were allowed to hold to term.

I know it’s a pretty unlikely scenario but I was thinking if the interest was due to be paid annually so hadn’t been paid yet so the answer is possibly 

It doesn't matter whether the interest has been paid or not, it matters whether or not you would be contractually entitled to it. Metro calculates interest daily on the balance of the account, and you would be entitled to all of that daily accrued interest. You would not be entitled to any interest you hadn't yet earned, so would need to be allowed to hold the product to term in order to receive this.

inspectorperez

I've got funds waiting to go into a 1 year fix at 5.9%. Just wondering if I should opt for a slightly lower option at 5.6% with another bank bearing in mind the uncertainty surrounding MB at the moment. Sounds like tomorrow's shareholder vote could be crucial in making one's mind up.

https://www.thisismoney.co.uk/money/markets/article-12790089/Short-sellers-ramp-bets-ahead-crunch-Metro-Bank-vote.html?ico=mol_desktop_money-newtab&molReferrerUrl=https://www.dailymail.co.uk/money/index.html

I appreciate the £85K safety net but would just prefer to avoid the hassle.

masonic

inspectorperez said:

I've got funds waiting to go into a 1 year fix at 5.9%. Just wondering if I should opt for a slightly lower option at 5.6% with another bank bearing in mind the uncertainty surrounding MB at the moment. Sounds like tomorrow's shareholder vote could be crucial in making one's mind up.

https://www.thisismoney.co.uk/money/markets/article-12790089/Short-sellers-ramp-bets-ahead-crunch-Metro-Bank-vote.html?ico=mol_desktop_money-newtab&molReferrerUrl=https://www.dailymail.co.uk/money/index.html

I appreciate the £85K safety net but would just prefer to avoid the hassle.

Metro is currently paying 5.8% on a 1 year fix. There are a couple of options paying more with appreciably less risk of imminent failure. Al Rayan is offering 5.85% and UBI (not the greatest feedback) is paying 5.9%.

GeoffTF

masonic said:

There are a couple of options paying more with appreciably less risk of imminent failure.

That is very unlikely. They are (just about) profitable and have recently raised another £1 billion. I would not buy their shares or bonds, but depositors should be fine.

masonic

GeoffTF said:

masonic said:

There are a couple of options paying more with appreciably less risk of imminent failure.

That is very unlikely. They are (just about) profitable and have recently raised another £1 billion. I would not buy their shares or bonds, but depositors should be fine.

Unlikely as it is, no other provider is facing an existential crisis currently, so I don't see the attraction personally, especially at a lower rate than can be achieved elsewhere. As I mentioned upthread, it is the FCA investigation into potential regulatory breaches relating to organised crime that is of greater concern to me, as I've seen how enforcement action can lock up savers' money. Perhaps not so much a concern when it's being locked up for a year anyway, but I understand completely why someone would rather not go through it.

GeoffTF

I have just spotted his article here:

https://www.thisismoney.co.uk/money/markets/article-12790089/Short-sellers-ramp-bets-ahead-crunch-Metro-Bank-vote.html

The deal to provide extra capital has been approved by the bond holders, but not yet by the shareholders, so imminent trouble is not impossible here. Nonetheless, I do not expect Metro to go down in the near future. Long term prospects are a different matter. They have opened a big shiny branch near me. Lots of staff seven days a week, but I have not seen many customers in the few times that I have looked in.

subjecttocontract

My local Metro branch is full of customers with a queue waiting to be seen. It's so busy in there at the moment, I wouldn't go in to open an account without an appointment because I'd have a very long wait. They are top of the pops on ISAs & savings accounts so it's no surprise that they are popular. I think they are struggling to cope with demand in my home town.

I view Metro as far less risk than Virgin. Metro are covered by the FSCS guarantee so any problems mean all depositors will get their money within days of closure. With Virgin I have no idea when I will get my ISA transferred. It might seem a different problem but the issue is the same......it's one of confidence.