Seemingly great savings rates - but watch the "Issue" trick

Notmyrealname2

I first saw Al Rayan playing this game 2 years ago and we had to keep moving to a new account.....- a bank offers a great savings rate but then it either reduces or doesn't keep pace with the best and they close that "issue" and bring out a new "issue" with a great savings rate ..... repeat... repeat.
Well now it seems Kent Reliance are doing the same.  Back in September their Easy Access Issue 65 was paying 5.01% which was pretty good ! They withdrew the product in October - it now pays 4.90%. Replaced by Easy Access Issue 66 paying 5.06% in October - withdrawn in January. Replaced by Easy Access Issue 67 paying 5.11% withdrawn later in January replace by Easy Access Issue 68 paying 5.07%.
Issue 68 looks attractive, but beware the hassle of staying with their latest account to get the best rate.

NB As the products are withdrawn, I'm struggling to find what interest they're now paying on the Issue 66 and 67.  So maybe Issue 65 was an isolated instance .... ;-)

Wheres_My_Cashback

Shock, horror, bank reduces interest rate and other accounts give better rates.

Hold the front page, what a dastardly 'trick' !

Middle_of_the_Road

This is how many savings providers operate. To keep getting the top rate, you need to regularly check for withdrawn and new issues.

ColdIron

This is very common with variable rate accounts. The alternative is to have one 'issue' with a single rate (below the best rate). That would disadvantage those of us that are prepared to chase the best rates and effectively cause us to subsidise people who can't be bothered

Qyburn

Old news. Abbey National and others were doing this back in the days when you took your pass book into a branch to make a deposit or withdrawal.

Hoenir

If a financial institution needs funds then it will offer a competitive rate to draw the money in. Once the objective has been achieved. Then the product will be withdrawn. That's a pure commercial decision.  

The bottom line is that banks make money on the difference between what they borrow at and what lend they out. Nothing more complex than that. 

1spiral

I think the clue is in "Issue 68"

Notmyrealname2

I think it's more the frequency of changes than the fact they're doing it that I find concerning  One account was only available for a fortnight - Issue 67 came and went before I was able to do anything :-D

eskbanker

Notmyrealname2 said:

I first saw Al Rayan playing this game 2 years ago and we had to keep moving to a new account.....- a bank offers a great savings rate but then it either reduces or doesn't keep pace with the best and they close that "issue" and bring out a new "issue" with a great savings rate ..... repeat... repeat.
Well now it seems Kent Reliance are doing the same.  Back in September their Easy Access Issue 65 was paying 5.01% which was pretty good ! They withdrew the product in October - it now pays 4.90%. Replaced by Easy Access Issue 66 paying 5.06% in October - withdrawn in January. Replaced by Easy Access Issue 67 paying 5.11% withdrawn later in January replace by Easy Access Issue 68 paying 5.07%.
Issue 68 looks attractive, but beware the hassle of staying with their latest account to get the best rate.

NB As the products are withdrawn, I'm struggling to find what interest they're now paying on the Issue 66 and 67.  So maybe Issue 65 was an isolated instance .... ;-)

https://www.kentreliance.co.uk/interest-rates has the rates for withdrawn accounts, and suggests that they don't actually change the rates when withdrawing them from sale, so not only do 66 and 67 remain as above, but 65 is still at 5.01% AER, even though monthly interest is based on the gross rate of 4.90% (i.e. that's not a change).

poseidon1

Yes, I have been using Kent Reliance since 2015 and their ever changing new issues can be irritating, but I have stuck with them and their sister bank Charter Savings, due to the consistency of their competitive offerings. Simply had to be vigilant to ensure my current issue was their best on offer.

Shylock_249

And of course continually moving money from one account to another makes it difficult to keep track of the interest(s) paid and reported to HMRC.  HMRC are notified by Banks/BS of actuall interest paid BUT they also estimate interest of accounts you very well might have closed when moving from one account to another.  Be sure to check the figure supplied by HMRC when they send you their tax code notice.