Does a bank have obligation to tell you about rate changes on account?

SparciaM

I have an e-savings account with First Direct. I use it primarily to save for xmas, putting £2 a week in it and £7.50 a month. You get 5.5% interest rate at the moment, but you can't find the account on their website and FD said that they're not opening anymore of those accounts.

I thought with rate changes banks have to publish this changes either online or in a newspaper, but if the bank isn't doing the account anymore for new people how would they tell you? I suppose they could email every customer with the account to tell them.

If the account drops from 5.5 to say 5% but there is no literature on the change, can you get FD to re-imburse any lost interest as you didn't know the account with actually paying less than you thought?

Stephen_Leak

They do have an obligation, but this could be met by publishing a notice in something like The London Gazette.

gt94sss2

The interest rate for the e-savings account is on the First Direct website

Regards
Sunil

Mark7799

Rates usually all change together and I've seen newspaper ads with the rate changes mentioned and a note to the effect 'these accounts are not available to new savers'

YorkshireBoy

Have I read somewhere that it's only if a rate moves 0.5% relative to BOE rate that they have to notify you personally (and beforehand?)?

Otherwise, they'll have it written in the T&C's that they'll have the new rates advertised on their website, in branch, and in two national newspapers...and they may then notify you personally up to 30 days after the change.

nilrem_2

YorkshireBoy wrote: »

Have I read somewhere that it's only if a rate moves 0.5% relative to BOE rate that they have to notify you personally (and beforehand?)?

From This is money website -:

This sneaky move will allow banks to edge around the Banking Code which insists they write to savers if they move rates by more than 0.25% compared with base rate.
They can also move their rates by up to 0.5% out of line with base rate in a rolling 12-month period without telling you personally.

Milarky

Thanks Sunil, I often go to the FD webiste and even I was unaware that their rates had changed - no secure waiting for me to let me know etc

The general position is covered by the provisions of the Banking Code.

'Key Commitments' (page 6)

We will help you use your account or service by sending you regular statements (where appropriate) and we will keep you informed about changes to the
interest rates, charges or terms and conditions.

'Interest' (page 8)

You can find out about our interest rates by:
• phoning our helpline;
• looking on our website;
• looking at the notices in our branches; or
• asking our staff.

We will also tell you our website address, our helpline numbers and the other ways in which you can find out about changes in interest rates on your accounts.

Changes in interest rates

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

When we change the interest rates on your accounts, we will update the information on our phone helpline and our website within three working days. To help you compare rates, the old rate will also be available on our website and our helpline.

Interest on savings accounts
To help you compare interest rates on all our savings accounts more easily, at least once a year we will send you a summary of these products and their current interest rates unless your account has less than £500 in it. This summary will also include:
• accounts that are no longer available; and
• details of how you can find out about the current interest rates that apply to your accounts.

We will also tell you the different interest rates which have applied to your account during the year and any changes in the Bank of England base rate (unless we
have already told you personally about these or if your account has less than £500 in it).

(page 9)

If you have a variable-rate savings account with £250 or more in it and the interest rate has fallen significantly compared with the Bank of England base rate, we will contact you within a reasonable period of time to:
• tell you that this has happened;
• tell you about our other savings accounts and offer to help you to switch to one of these accounts if you want to;
• tell you that you can withdraw all the money in your account; and
• give you a reasonable period of time to switch to another account or withdraw the money without any notice period or any charges.

MarkyMarkD

I think all the posts on this thread after gtsss's are superfluous. FD do disclose the rate on this account, so they are providing all the information the OP should have expected.

Presumably the OP's going to apologise for doubting FD?

EdInvestor

Must you be so pompous MMD



PS Happy New Year to all....

Mikeyorks

MarkyMarkD wrote: »

Presumably the OP's going to apologise for doubting FD?

.... or for posting a virtually identical thread just 10 days ago :-

http://forums.moneysavingexpert.com/showthread.html?p=7528493#post7528493

...... and made stranger by the several claims to have worked in Banking. Very odd.

nilrem_2

MarkyMarkD wrote: »

I think all the posts on this thread after gtsss's are superfluous.

Thanks for those words of wisdom and for giving any newcomers the confidence to try to help others!