Bank accounts offering bonus interest rates

9 comments  Add a comment

There is a plague of bank accounts offering bonus interest rates to new customers for the first year, after which the rate plummets to less than 1%.

The apparent purpose is to win new customers and 'grow' the business, but 12 months later these customers disappear to find the next bigger, better deal at another bank.  Doubtless a few will remain, those who are too busy or too weary for this fiasco or can't access comparison websites.

The High Street banking model seems calculated to maximise customer movement, they call it customer churn or attrition - although industry statistics show that acquiring a new customer costs 5 to 10 times more than retaining an existing one.  The result is an illusion of productivity.

wasting our precious lives moving money...

The money that should be used to pay reasonable interest to customers is squandered on advertising campaigns, upgrading computer systems, opening and closing accounts, producing reports, employing financial advisors, composing and posting letters, much of which would be unnecessary if they retained their existing customers. 

Strange how seldom the letters tell us how little interest we are getting!  Meanwhile we customers are wasting our precious lives moving money around just to keep our heads above water.

Have they thought of an account with interest rates which start low but double annually to a maximum of 1% above base rate?  I'll certainly deposit my money with a bank that gives this a try.

This comment which I heard recently is strongly stated, but essentially true:  "Any idiot can make a fortune by charging 20% for borrowing and paying 0.0005% for deposits, yet they somehow think they are doing us a favour and that they are contributing to society.  Well no they're not, they are just leeches in my opinion!"

By: C Nash

Leave a comment

First Prev 1/1 Next Last

-- sort order --Recent firstOldest firstAuthor

GD

banks are a business
they are run to make money
don't be so surprised if they do

05/11/13 GD

0

boblet

Banking, Investing & insurance could just as easily be run in Las Vegas, amidst its friends the casino's.

17/05/13 boblet

-7

Nick

Well not everyone is as clever as you are m8. Not everyone goes to MoneySupermarket.com. Some people are too thick to even read so it is likely that they won't be moving their money around so the bank keeps the money. You'd be amazed how stupid some people are - like the mug punters, the lottery/scatchcard buyers - completely waste of money for me. And yet they keep on doing that and thats exactly how banks/bookies make their money.

17/05/13 Nick

-2

Bankrupt Britain

I bank with that bank in Britain which is spending huge sums of money claiming it wants to be the most helpless bank in Britain.

Why aren't banks "honest" about the business they are in? Why are all of Britain's managers useless at running businesses, and get a paid a fortune for doing badly? Why?. All hopless cases. All quite incapable. These institutions destroy lives and careers. They are run by empty headed blondes.

27/12/10 Bankrupt Britain

6

Marsh

The ONLY thing to do is play the game. Grab the higher first year rate and then be sure to reinvest immediately the rate falls. It really is easy to do online and quite satisfying to keep getting the extra percentage.
Same goes with insurance, the best offers are to be found on line and when switching to a 'new' provider. Look out also for 'we will match quotes' offers.

22/10/10 Marsh

0

Cantor

Some Banks give service- some don't. At a Branch of Barclays yesterday seven queuing and two positions working at 11 am. After about 10 minutes still no movement and still no extra staff. I complained to the only member of staff visible "on the floor". No action so walked out. Don't CUSTOMERS matter any more ?

30/09/10 Cantor

-4

Money Fan

I swear to God sometimes I think my money would be safer if it were stuffed in a shoe box under my bed.

15/09/10 Money Fan

-14

Marjoninos

Making as much money as possible is one thing but to do it in a way which misleads or leads customers up the wrong path especially when it denies them flexibility to change once they have found out the truth of the hidden factors is nothing short of deceit.

Too many companies generally offer false security and will hold you to ransom if they can do so legally.

One company I have seen the other side of now is Virgin Media.

15/09/10 Marjoninos

-2

fanny-ann

I would love such a scheme but sadly no one values existing customers now a days

15/09/10 fanny-ann

1

First Prev 1/1 Next Last

-- sort order --Recent firstOldest firstAuthor