Notice of interest rate reduction on notice accounts

slinger2

I've got a 95 day account with RCI Bank still paying a generous 5.6%, although not for too much longer. Their summary box says "The interest rate is variable, and we can change the rate of interest on existing accounts by giving you at least 109 days’ notice" I have a 90 day account with Oxbury which says "Oxbury can make changes to your interest rate, any such changes will be communicated to you providing at least 14 calendar days’ notice in addition to any notice period for a reduction in rate" However when I look at Charter Savings Bank they say "If we decrease the interest rate we will give you at least 14 days’ notice of the reduction", which is less encouraging.

Just wondering whether there are any rules about this, or is it just different for every account.

flaneurs_lobster

It varies greatly as you've seen. From memory the regulations say "reasonable notice" must be given, not very prescriptive. Firms often say that they give minimal notice if they're increasing the rate (not that this will be an issue for the foreseeable).

Hoenir

Providing financial institutions operate within FCA guidelines and regulations they can do as they wish. 

surreysaver

Reasonably, organisations ought to give notice of at least the period of which you need to give to withdraw money. Or waive the notice you have to give, if you wish to make a withdrawal due to a rate cut

Veteransaver

The 95 day notice account they have to give you at least 95 days notice because you've effectively entered into a fixed term deposit with them. So they are effectively giving you 14 days notice too, as you can't get your cash out for at least 95 days

jaypers

Investec give 104 days notice which I thought was good. 

slinger2

Looking again at the Charter Savings Bank account, there is more information in their General Savings Conditions which says "20.7 If we decrease the interest rate relying on paragraph 20.3 or the amount of notice of the change we give you is less than 14 days plus the amount of notice you have to give us to make a withdrawal from or to close your Account then you will then be free to close your Account (without notice, loss of interest or additional charges) at any time within 30 days ..." So it seems that if they don't give you the 95+14 days notice you've got the option of simply taking your money out without notice. So perhaps it's not a bad as I first thought. Should add that it doesn't seem to be anything they've ever done, at least not in recent times.

sunflower_5901

I have a 90 day notice account with Vanquis Bank.
They have confirmed that they will give only 30 days' notice of a reduction in interest rate on this account.
This is clearly an unfair term and contrary to all the other banks mentioned above.
I have contacted both FSCS and Bank Of England and neither body can point me to any rules which stipulate that Vanquis Bank should provide a minimum of 90 days' notice of an interest rate reduction on this account.
Can anyone offer any advice?

slinger2

sunflower_5901 said:

I have a 90 day notice account with Vanquis Bank.
They have confirmed that they will give only 30 days' notice of a reduction in interest rate on this account.
This is clearly an unfair term and contrary to all the other banks mentioned above.
I have contacted both FSCS and Bank Of England and neither body can point me to any rules which stipulate that Vanquis Bank should provide a minimum of 90 days' notice of an interest rate reduction on this account.
Can anyone offer any advice?

I suppose the advice is to give them notice that you want to close your account, and then move it elsewhere.

As noted above there are other providers that either (1) give you 90+14 days notice of a rate reduction or (2) can give you short notice periods of a rate reduction but let you close the account penalty free in those situations.

Barkin

sunflower_5901 said:

I have a 90 day notice account with Vanquis Bank.
They have confirmed that they will give only 30 days' notice of a reduction in interest rate on this account.
This is clearly an unfair term and contrary to all the other banks mentioned above.
I have contacted both FSCS and Bank Of England and neither body can point me to any rules which stipulate that Vanquis Bank should provide a minimum of 90 days' notice of an interest rate reduction on this account.
Can anyone offer any advice?

This is covered in their T's&C's. You can withdraw your money and/or close the account without serving the notice period. 

slinger2

Barkin said:

sunflower_5901 said:

I have a 90 day notice account with Vanquis Bank.
They have confirmed that they will give only 30 days' notice of a reduction in interest rate on this account.
This is clearly an unfair term and contrary to all the other banks mentioned above.
I have contacted both FSCS and Bank Of England and neither body can point me to any rules which stipulate that Vanquis Bank should provide a minimum of 90 days' notice of an interest rate reduction on this account.
Can anyone offer any advice?

This is covered in their T's&C's. You can withdraw your money and/or close the account without serving the notice period. 

https://www.vanquissavings.co.uk/pdf/general-terms.pdf section 19 says "If we reduce the interest rate that applies to your account, we’ll tell you at least 30 days before doing so." There is a section "Your options if you’re not happy with a change we’re making" but it's not clear to me that it covers interest rate reductions.