Interest Rates

SparciaM

Do banks need to tell you when they're lowering their interest rates?

I bank with smile and have a c/a and ISA with them.

The c/a was 3.05% and is now 2.78% with no communication from the bank, I only found out due to looking on the home page of their website.

The ISA was 5.75% and is now 5.5% again with no communication. They've also increased the OD interest to 16% again with no communication.

I thought according to the banking code banks had to give you 30 days notice of any changes, or is that just for T&Cs and not for interest rates.

Finally, anyone know any good ISA rates higher than 5.5% that you can transfer into?

masonic

SparciaM wrote: »

Do banks need to tell you when they're lowering their interest rates?

I thought according to the banking code banks had to give you 30 days notice of any changes, or is that just for T&Cs and not for interest rates.
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It's not that they have to give you 30 days advanced notice - they must inform you within 30 days after the change takes place. The banking code states:-

4.4 We will keep you informed of changes in the interest rates on your accounts and will tell you about the ways we will do this.

The requirement to “keep you informed of changes in the interest rates on your accounts” will be fulfilled by either:
• telling customers personally within thirty days of the change (subject to the provisions for Savings Accounts below); or
• within three working days of the change, putting notices of our new rates in our branches, on our website and in the newspapers we usually use. To help customers compare rates more easily, our newspaper notices will show clearly the old and new rates.

So they do not normallty need to inform you personally of the change. However:-

If a customer has a variable-rate savings account including a fixed rate account that has become variable after the fixed rate has expired (including accounts that are no longer available) with £500 or more in it and the interest rate falls by more than 0.25 percentage points on a rate change compared with the Bank of England base rate (a ‘relevant rate change’), a subscriber will personally notify the customer within a reasonable period of time.

The key point being that the rate must have fallen more than 0.25% relative to the base rate (which has recently fallen 0.25% itself - so a >0.5% drop in rate would currently be necessary in order for them to be required to inform you personally). Also note the undefined 'reasonable time', which is less strict than the 30 day requirement above.

SparciaM wrote: »

Finally, anyone know any good ISA rates higher than 5.5% that you can transfer into?

Kazza maintains a comprehensive list here, but right now may not be the best time to transfer, since banks are still in the process of cutting rates following the base rate being reduced just under a month ago.