Banks are slow to increase rates on savings accounts, but quick to reduce them

Re:Banks are slow to increase rates on savings accounts, but... by frereubu on Saturday July 25, 2020 @08:54AM (#23948824)

In the UK this has got a lot better with banks being forced to offer an "account switching service", which makes it trivial to change your current (checking) account. Things like salaries, standing orders and direct debits (for utility bills etc.) are automatically transferred across. It doesn't work with savings accounts though as far as I know, so it doesn't help much with managing interest rates other than interest-paying current accounts.

As you say though, there are so many complicated conditions around getting paletry interest rates - only available on first £5k, or rates that reset to 0.1% after 12 months - that I'm not sure people would change much anyway.

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Re:Banks are slow to increase rates on savings accounts, but... by OJFord on Saturday July 25, 2020 @09:46AM (#23949125)

But it's also not a problem for savings accounts in the first place? Other than if you have a standing order(s) paying in I suppose, but that's probably only one, and unlike direct debits etc. all in your control and less hassle to move.

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Re:Banks are slow to increase rates on savings accounts, but... by frereubu on Saturday July 25, 2020 @01:08PM (#23950749)

It's certainly less of a problem. But people are notoriously lazy, and a service where you could switch savings accounts in the same way as a current account would make it more likely. It's the cost / benefit trade-off, so if differences in interest rates are very small you need to make it even easier for people to switch.

For example, I'm being paid 0.3% on a current-acount-linked savings account. If I could switch that to NS&I (1%) more simply than I can currently, I would. But given the relatively low amount in the account, and how much I feel my time is worth, it just doesn't feel worth it to me. Yeah, I'm lazy. But so are lots of other people, and it would change the dynamics of the savings account market if it was easy enough to make me want to switch.

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Re:Banks are slow to increase rates on savings accounts, but... by luckylion on Saturday July 25, 2020 @10:30AM (#23949443)

Does that work reliably in the UK? Germany has similar a similar mandatory service, but the few people I know that switched banks using that service all ran into major trouble, like rent payments, insurance premiums etc not going through and the two banks pointing at each other "we don't know, it's those guys".

In the end, I believe the best course of actions would to simply make account numbers transferable. There's no good reason why I shouldn't be able to switch my bank and keep my account number etc just like I do with my mobile phone number and provider. Of course, Bank Codes being used makes this more difficult (thank you, regulation).

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Re:Banks are slow to increase rates on savings accounts, but... by rand49an on Saturday July 25, 2020 @10:33AM (#23949472)

I've switched banks 4 times over the last few years to take advantage of different deals offering a few hundred pounds or so for join-ups. Never had an issue.

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Re:Banks are slow to increase rates on savings accounts, but... by aembleton on Saturday July 25, 2020 @11:32AM (#23949919)

Yes, it works reliably and comes with a guarantee that "If anything goes wrong with the switch, as soon as we are told, we will refund any interest (paid or lost) and charges made on either your old or new current accounts as a result of this failure."

https://www.currentaccountswitch.co.uk/Pages/Home.aspx

https://www.currentaccountswitch.co.uk/SiteCollectionDocumen...

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Re:Banks are slow to increase rates on savings accounts, but... by detaro on Saturday July 25, 2020 @10:51AM (#23949602)

I feel like account numbers being transferrable would be worse for potential for fuckups.

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Re:Banks are slow to increase rates on savings accounts, but... by merb on Saturday July 25, 2020 @10:49AM (#23949585)

would be way easier if iban's would be interchargeable or some kind of iban proxy.

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