Do banks have to pay interest on Savings

NoMoneyNoWorries

I think they don't have to and that interest on Savings is just for interbank competiton.
In my opinion  no matter how hard savers bang on about low rates nothing actually happens or at most some token gesture. 

la531983

I mean, the interest rate you get is advertised before you open the account.  If you dont like it, move your money or dont open the account in the first place, whats the problem here?

eskbanker

NoMoneyNoWorries said:

I think they don't have to and that interest on Savings is just for interbank competiton.
In my opinion  no matter how hard savers bang on about low rates nothing actually happens or at most some token gesture. 

Your post is confusing - are you asking about whether there's a legal or regulatory requirement for financial institutions to pay interest on deposits (no), or does your reference to 'token gesture' signify some sort of dispute over an account that should be paying interest as part of its terms, or are you just making the obvious point that savers need to shop around and vote with their feet if they're serious about earning meaningful interest?

wmb194

NoMoneyNoWorries said:

I think they don't have to and that interest on Savings is just for interbank competiton.
In my opinion  no matter how hard savers bang on about low rates nothing actually happens or at most some token gesture. 

Yes, do you have a specific complaint? They definitely do compete for funding in order to keep themselves going e.g., recently Metro Bank reportedly saw deposit outflows due to worries about its health and now it has appeared at the top of the best buy tables seemingly in an attempt to staunch the flow. There are lots of similar stories from around the time of the Financial Crisis.

jimjames

NoMoneyNoWorries said:

I think they don't have to and that interest on Savings is just for interbank competiton.
In my opinion  no matter how hard savers bang on about low rates nothing actually happens or at most some token gesture. 

I think you'll struggle to justify a claim that 8% is a token gesture for interest payments

Hoenir

If a bank didn't offer savers interest on their deposits. Then there'd be run on the bank. Would be commercial suicide. 

ColdIron

NoMoneyNoWorries said:

In my opinion  no matter how hard savers bang on about low rates nothing actually happens or at most some token gesture. 

I took out a 1 year fix mid 2021 at 0.85%. Recently you could get 6.20% +

Hardly nothing or a token gesture, it's more than 7 times the rate over only 2 years

You can get easy access savers now at 5.25% BoE base rate, in 2021 they were closer to 0.50%. That's an over 10 fold increase

35har1old

jimjames said:

NoMoneyNoWorries said:

I think they don't have to and that interest on Savings is just for interbank competiton.
In my opinion  no matter how hard savers bang on about low rates nothing actually happens or at most some token gesture. 

I think you'll struggle to justify a claim that 8% is a token gesture for interest payments

If you are referring to the Nationwide Regular Saver paying 8% it is only a headline grabbing rate restricted to £200 per month there 1 year is only paying 5.2%

NoMoneyNoWorries

Wrt my original post:
I have read some comments on this site and some other sites (like This Is Money ) where the commenter is going  about the government/FCA/BOE  NOT MAKING the  banks put their savings rates up.
I was just saying that the banks as far as I know have no legal directive  to pay interest on savings  and FCA/BOE cant force them to put rates up.

friolento

NoMoneyNoWorries said:

Wrt my original post:
I have read some comments on this site and some other sites (like This Is Money ) where the commenter is going  about the government/FCA/BOE  NOT MAKING the  banks put their savings rates up.
I was just saying that the banks as far as I know have no legal directive  to pay interest on savings  and FCA/BOE cant force them to put rates up.

That's right, nobody has the power to tell banks what their savings interest rates must be. Government only has control over the NS&I rates, which are good when they need to raise money, and in the doldrums when they don't. It's much the same principle that banks apply.

eskbanker

NoMoneyNoWorries said:

Wrt my original post:
I have read some comments on this site and some other sites (like This Is Money ) where the commenter is going  about the government/FCA/BOE  NOT MAKING the  banks put their savings rates up.
I was just saying that the banks as far as I know have no legal directive  to pay interest on savings  and FCA/BOE cant force them to put rates up.

That seems to be a different point from your first one, i.e. whether banks should pass on base rate changes is a separate matter from whether they should offer interest at all, but on the former point, the FCA has issued an action plan which potentially will entail enforcement, now that there's a consumer duty in force:

https://www.fca.org.uk/news/press-releases/action-plan-cash-savings