The email from First Direct was badged “important information”. Customers were told the following: that the already pathetic rate of interest they are getting on their savings is being slashed yet further.
For example, on a “bonus savings” account that has less than £25,000 invested you shall soon be paid just 0.4%, down from a puny 0.6%.
A cash ISA will pay, from mid-December, 0.55%, down from 0.85%.
Even by the standards of banks, the statement I got after requesting an explanation doesn’t do much to reassure.
“Our savings range is designed to support customers and encourage good savings habits… there are a number of different factors that influence the interest rates of savings accounts, and each provider will have their own reasons for the products they offer and the associated interest rates. Our savings accounts are competitive and cater for the different needs of savers.”
Competitive? Different needs? Who thinks this stuff up?
While there is much talk of interest rates going negative in the wake of a no-deal Brexit, they haven’t yet. First Direct, owned by the mighty HSBC, is jumping the gun.
Even if the move on savings is financially necessary, which I doubt, I’ve yet to receive a similar note telling me my mortgage has also been cut.
Assuming the Bank of England does lower interest rates in the run-up to Christmas, we can expect big banks to do the same.
First Direct has already jumped. On the upside, I guess you could say the likely flood of money into equities from people seeking a decent return will at least protect the FTSE. It’s still a poor show from First Direct, which used to be one of our most trusted bank brands.
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