Online banks vs High Street brands (Easy access savings query)

sherbie28

Hi,

My parents have money in NS&I easy access savings and the interest rate is 3.3%. The money needs to be easy access so it limits the options but I've been suggesting somewhere like Cahoot who are currently offering 4.55%. I've explained they could be getting another £2000 extra a year in interest but they don't trust non High St. I can only think with the recent high profile hacking (M&S etc) what's stopping the "hackers" doing the same with banking. Any thoughts?

elsien

Thoughts are that if they don’t like online less well known brands, that’s their decision to make. My sibling is the same. 

If they accept they get a slightly lower rate with the perception of more security (whether that perception is accurate or not) It may be hard to persuade them otherwise. 

wmb194

sherbie28 said:

Hi,

My parents have money in NS&I easy access savings and the interest rate is 3.3%. The money needs to be easy access so it limits the options but I've been suggesting somewhere like Cahoot who are currently offering 4.55%. I've explained they could be getting another £2000 extra a year in interest but they don't trust non High St.

I can only think with the recent high profile hacking (M&S etc) what's stopping the "hackers" doing the same with banking. Any thoughts?

Cahoot is a Santander brand so it is high street but ultimately it's their choice, you can only make the suggestion.

eskbanker

sherbie28 said:

My parents have money in NS&I easy access savings and the interest rate is 3.3%. The money needs to be easy access so it limits the options but I've been suggesting somewhere like Cahoot who are currently offering 4.55%. I've explained they could be getting another £2000 extra a year in interest but they don't trust non High St. I can only think with the recent high profile hacking (M&S etc) what's stopping the "hackers" doing the same with banking. Any thoughts?

No company can guarantee immunity from cyber attack, but in general financial institutions would be expected to have better defences in place than retailers.  However, institutions only being accessed online doesn't necessarily mean any increased risk of hacking, i.e. NS&I could just as easily be hacked (and isn't actually on the High Street anyway) - anyone spooked by this would really end up keeping wads of notes under the mattress.

The best advice will generally be to avoid having all eggs in one basket by using multiple accounts, and to ensure that they have FSCS protection.

sherbie28

My mum seems to think Santander are not trustworthy (no idea what evidence she has for this). I think they went with NS&I because it's government backed and great for putting a lump sum originally while I suggested better rates to put the 170k in (so they were 85k protected (170k on joint accounts). 

Albermarle

sherbie28 said:

My mum seems to think Santander are not trustworthy (no idea what evidence she has for this). I think they went with NS&I because it's government backed and great for putting a lump sum originally while I suggested better rates to put the 170k in (so they were 85k protected (170k on joint accounts). 

She might be comfortable with an established  building society.

Leeds BS and Coventry BS are large institutions with usually pretty competitive rates.
Nationwide sometimes has reasonably competitive rates on some products, but not others.