What private banking accounts have the lowest interest rates?
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Nomi_Omi23
1 year ago
Expert Financial Adviser Answer
Darren Smith
answered 1 year ago
banks/building societies set their interest rates at a level to attract new business.
a good indicator in the past of a building society being in trouble was that it would offer "bonkers" interest rates as it was desperate to shore up its reserves.
equally there are banks now that have been told that they must shed customers to reduce their dominance in the market - the new lloyds group and rbs are good examples. RBS has sold over 200 branches to santander and the associated customers.
a cheaper way to achieve this same result is to "coax" people to leave by offering dire returns. But what if they dont leave? well then the bank makes even more profit! its win:win.
in choosing a provider for any financial product you need to consider the "package" how does the complete proposition add up, dont just focus on headline rates.
comparison sites can be useful when your need is simple ie which credit card offers 0% balance transfers the longest.. but if you need to know results on combined criteria, you still need to do more legwork. providers rely on this to put you off of reviewing your position and staying where you are - they call it inertia.
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a good indicator in the past of a building society being in trouble was that it would offer "bonkers" interest rates as it was desperate to shore up its reserves.
equally there are banks now that have been told that they must shed customers to reduce their dominance in the market - the new lloyds group and rbs are good examples. RBS has sold over 200 branches to santander and the associated customers.
a cheaper way to achieve this same result is to "coax" people to leave by offering dire returns. But what if they dont leave? well then the bank makes even more profit! its win:win.
in choosing a provider for any financial product you need to consider the "package" how does the complete proposition add up, dont just focus on headline rates.
comparison sites can be useful when your need is simple ie which credit card offers 0% balance transfers the longest.. but if you need to know results on combined criteria, you still need to do more legwork. providers rely on this to put you off of reviewing your position and staying where you are - they call it inertia.
