, Columnist
UK Banks Are Playing With Deposit Rate Fire
They should reconsider how they treat depositors. No one wants to see a gentle drift of withdrawals turn into a flood.
Play nice.
Source: Bloomberg
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A letter went out this week from the Treasury Committee to a group of UK banks asking them why the interest rates they pay to their depositors are so very low. It’s a perfectly good question.
If the bank rate is 4.25% (as it was when the letters went out), why, the committee asked, are Nationwide, Santander, TSB and Virgin Money — which are responsible for a quarter of all of the UK’s personal current accounts — paying their savers between 0.7% and 1.3% on instant access accounts? How do they decide on these rates? And do they do anything to alert customers to the alternatives?