PTSB Significantly Cut All Deposit Rates, Leave Mortgage Rates Static

ardmacha said:
The only good thing left to say about PTSB is that they give reasonable notice of changes. I will leave the regular saver close to the max with a modest monthly contribution and seek a home for the rest.



In some of the commentary in the media, people don't fully make the connection between "free" banking and interest rates. If interest rates are a bit higher the bank profits from the money in the accounts e.g. if rates were 5% then a €500 min would mean €25 min of interest foregone (and probably twice that on average) , enough to run the account without further charge. If on demand accounts have an interest rate of 0.5% then there is nothing to fund the running of the current account, even with a big minimum. In this environment, "free" current accounts are thing of the past, alas.
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You need to bear in mind that PTSB also pay interest on a certain amount of the balance in the current account, currently 1% gross on the first €1,000. Not a lot but still costing them a significant amount when all customers' accounts are totalled I'd imagine. This rate used to be higher and was on the first €1,500 so I don't think they were ever benefitting as outlined in the previous post. I'm surprised that PTSB have not removed this benefit but they are obviously still keen on attracting customers to the free current account despite the fact that it is rumoured to be closing to new customers soon.

I moved all my deposits from PTSB to Rabodirect last week except for my regular saver accounts and am glad I have done so now.
 
llgon said:
You need to bear in mind that PTSB also pay interest on a certain amount of the balance in the current account, currently 1% gross on the first €1,000.
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PTSB's current account still pays 1% on the first 1500.
 
I disagree "free" current accounts are a thing of the past. Yes it is moving in this direction but at the same time people have more choice with start up company's busy developing new apps for example.

At the moment you can still go to PTSB or EBS and run your current account totally FREE.
 
DMcL1971 said:
PTSB's current account still pays 1% on the first 1500.
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Yeah, on their new customer current account product only. The maximum payout is just 15 EUR per year at this rate.

You can bet that the interest payment will be a thing of the past, for new customers anyway, when PTSB change their current account product offering in apparently in September.

theresa1 said:
At the moment you can still go to PTSB or EBS and run your current account totally FREE.
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You can run a free day-to-day banking current account with Ulster, AIB, EBS and PTSB if you copy with their respective T&C's. BoI and KBC offer no way out of the fees with their standard product.

theresa1 said:
Yes it is moving in this direction but at the same time people have more choice with start up company's busy developing new apps for example.
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In the years to come, some sort of start up global or pan European app-only bank has the potential to disrupt the current account market. There are a few companies tying to do this but it is difficult for them to match the large service offering that full service retail banks offer. That said, it is surely a case of when and not if an app-only bank launches a service akin to a current account.

theresa1 said:
I disagree "free" current accounts are a thing of the past.
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I see it as been difficult for regulators to stop the cross subsidation of current account product offerings. Many companies have loss leaders.
 
Sorry, yes I didn't mention Ulster because of the high €3,000 and AIB because of the €2,500 minimum balance.
It will be interesting when An Post launches it's new current account product.
 
Though current accounts do cost a bank money to provide, they are still the best way of attracting customers. Once they have a customers current account business they can then sell them their profitable products like loans, credit cards and mortgages. Even if a customer is not interested in these products the bank can persuade you to give them your saving, which provides them with their capital. It is a lot easier to sell your product to an existing customer.

I see free current accounts as a loss leader that allows them to sell their more profitable products.

Also, I can't see the provision of current accounts services as being a huge cost to them. It's not as if current accounts are new and have cost them a fortune to roll them out, it is just the same service that they have always offered. In fact it should cost them less to offer current account banking then it did in the past seeing as how the majority of day-to-day banking is now carried out online and using direct debit and standing orders. No more handling paper cheques, drafts or statements. It also allowed them to close branches and reduce staff. I know that it means that they have had to increase IT but surely that was coming anyway and it is easier to manage their business centrally through computer technology rather than manage tons of paper and staff.
 
I was shocked to notice my Instant Access savings account is now 0.05% the money was transferred to this from the INBS which gave a decent rate. I have now started to draw it down and transfer to Ulster banks saving account, but I can only transfer max €1,000 a month, it takes time and it will only accept max €15,000
 
roker said:
I was shocked to notice my Instant Access savings account is now 0.05% the money was transferred to this from the INBS which gave a decent rate. I have now started to draw it down and transfer to Ulster banks saving account, but I can only transfer max €1,000 a month, it takes time and it will only accept max €15,000
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And that PTSB Instant Access rate will drop further to 0.25% on the 20th of this month.
 
The "Bonus" on the Booster Bonus is being cut in half to 0.5% in the new year so I'll be moving the vast majority of my remaining savings out in January. I don't want to leave them completely but not having large deposits there any longer.
 
moneybox said:
At the way these interest rates are dropping, I fear banks will soon start charging us to keep our money with them.
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Negative interest rates on deposit accounts or bank charges on deposit accounts would be deeply unpopular. There are only a small number of global examples of banks adopting this approach with retail customers. At this stage, it seems unlikely that things will go that far.
 
CiaranT said:
Negative interest rates on deposit accounts or bank charges on deposit accounts would be deeply unpopular. There are only a small number of global examples of banks adopting this approach with retail customers. At this stage, it seems unlikely that things will go that far.
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How lower can you go than 0.05%................0.00%:(
 
It's only now I'm realising the scale of deposit rate cuts.

I have an online saver account.

Nov 2014 = cut to 1.75%

Four cuts during 2015.

By Oct 2015 = 0.25%
 
Yeah, the cuts have been savage to the PTSB Online Instant Access product. Hopefully, most customers have switched.
 
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