Rabo leaving it late....to announce new rate

New Rate Structure

Our standard variable rate is 3.75% which we have been quite clear about all year. By moving to 4.30% from Jan 1 (30 points over the ECB rate) we are increasing this by 0.55%.

Why have we reduced the 5% rate? We could not offer 5% up to €1million for money on demand. That would be totally unrealistic and unprofitable in the extreme. If we had kept the 5% rate we would have had to offer a lower rate on amounts over €10k as we do now. The majority of our customers have balances in excess of €20k so the drop to 3.75% isn't as attractive as it could be. So for lump sum deposits the 4.30% flat rate up to €1 million is quite competitive. The money is on demand, there are no restrictions on deposits or withdrawals (up to €1m) and it comes with a AAA-rating. The rate structure is simple and transparent.

As for remarks about rip-off - we are paying above the ECB rate for money on demand so how we can be accused of ripping people off is beyond us. Take a look at rates that the other banks pay on demand money (not the loss leading regular saver products) and you'll see rates of less than 1.0% - this is where they make a fortune.

RaboDirect
 
Re: New Rate Structure

RaboDirect said:
Our standard variable rate is 3.75% which we have been quite clear about all year.
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Actually I never found this clear. The website carried two rates: 5% on up to €10K and 3.75% on the balance. It also originally mentioned that the standard variable rate would apply from january 2008. It never explictly stated that the standard variable rate was the 3.75% one as far as I could see anyway.
 
Re: New Rate Structure

RaboDirect said:
As for remarks about rip-off
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RaboDirect, I am not accusing you of a rip-off. That was a light hearted remark based on the ongoing argument about the use of that term on AAM.

I realise you rationally choose to cater for the vast bulk of customers with greater inertia to maximise your returns and not the long tail of uber-switchers that populate AAM.
 
This must be RaboDirect's new "Jump Ship!" promotion... :D

[broken link removed]
Are you thinking what I'm thinking...?
 
Re: New Rate Structure

RaboDirect said:
As for remarks about rip-off - we are paying above the ECB rate for money on demand so how we can be accused of ripping people off is beyond us. Take a look at rates that the other banks pay on demand money (not the loss leading regular saver products) and you'll see rates of less than 1.0% - this is where they make a fortune.

RaboDirect
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The remarks about being a rip off were said in jest I suspect. You are free to set your rates at whatever level you see fit and I think it should be pointed out that 4.3% is still one of the best rates on the market. However, I am getting 4.30 for same day access to my money (which I don't have with Rabo by the time I transfer it) from another bank. I don't think anybody is having a go at Rabo but it is good to see that after years of banks taking advantage of peoples inertia with regard to changing accounts, that people are now chasing the best deals out there.
 
Re: New Rate Structure

RaboDirect said:
Our standard variable rate is 3.75% which we have been quite clear about all year. By moving to 4.30% from Jan 1 (30 points over the ECB rate) we are increasing this by 0.55%.

Why have we reduced the 5% rate? We could not offer 5% up to €1million for money on demand. That would be totally unrealistic and unprofitable in the extreme. If we had kept the 5% rate we would have had to offer a lower rate on amounts over €10k as we do now. The majority of our customers have balances in excess of €20k so the drop to 3.75% isn't as attractive as it could be. So for lump sum deposits the 4.30% flat rate up to €1 million is quite competitive. The money is on demand, there are no restrictions on deposits or withdrawals (up to €1m) and it comes with a AAA-rating. The rate structure is simple and transparent.

As for remarks about rip-off - we are paying above the ECB rate for money on demand so how we can be accused of ripping people off is beyond us. Take a look at rates that the other banks pay on demand money (not the loss leading regular saver products) and you'll see rates of less than 1.0% - this is where they make a fortune.

RaboDirect
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Thanks for the justification, however the kind of savvy investor (that you will find on AAM for example) will easily be able to better that rate. Switching is so easy these days most will leave Rabo quicker than the blink of an eye.
 
Kind disagree with most of the comments on here.

Rabo has stated, and I've no reason to not believe this, that the vast majority of savers have >20k on deposit with them. This change actually reflects an increase in interest for the year for people with deposits of >€25k, granted of only €12 for €20k pre DIRT, but its still an increase for majority of savers.

Also i can't see a mass panic of people extracting money from them if, at this stage, the vast majority of savers haven't already tried to maximise their returns from other institutions by saving only 10k with rabo and more elsewhere. (would love to know how many just have €10k on deposit with them?)

I my eyes my €5k is coming out from NRock as this rate is very close to theirs for what I would assume is a lot less of the risk.

And i have no ties whatsoever with Rabo, just introducing a bit of balance!
 
<edit> just noticed FA is 4.33% for everything over 15k, not sure if Rabo will lose too much business from people chasing 0.03%!
 
To be fair, 4.3% is not that bad when you consider everything. For anyone with the maximum in First Active to get the 5.22% (and who don't want the whole balance to drop back to 4.33%) or the 5% on the 7 day notice account with AIB, this is pretty much as good as it gets. Northern Rock's rate of 4.5% is better of course but since so many have ruled that out as an option, why should Rabo seek to better it?

People can switch to First Active but for amounts over 15,000 they'll have to forgo the 5.22% if they wish to get an extra 0.03% on the whole lot.
 
mollser said:
I my eyes my €5k is coming out from NRock as this rate is very close to theirs for what I would assume is a lot less of the risk.
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NR are giving an addition .5% for the next couple of months to customers who stayed with them. Making a grand total of 5%, if my maths are correct.
 
Re: New Rate Structure

Sunny said:
However, I am getting 4.30 for same day access to my money .
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Mind me asking where? Am with Anglo for years have their 7day which is paying me 4.1%, but slow to transfer money -cant transfer directly to third party- has to go to an account in my name first.
 
Towger said:
NR are giving an addition .5% for the next couple of months to customers who stayed with them. Making a grand total of 5%, if my maths are correct.
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For people who regard that as little more than a trap to catch their savings when the UK government defaults on its guarantees, that's just too big of a risk to take :)
 
Just a reminder NIB are still offering an ECB tracker saving account at ECB + 0.5% which is 4.5% currently from 0 to 50,000 Euros, so after you have maximised your first active account and your partners you might want to consder this. It is instant access too. I am sure others can give examples of other banks offering better rates then Rabo too !!
 
Re: New Rate Structure

Luternau said:
Mind me asking where? Am with Anglo for years have their 7day which is paying me 4.1%, but slow to transfer money -cant transfer directly to third party- has to go to an account in my name first.
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Ulster bank e-saving account. I tell a lie as I just checked and it is at 4.27 but you can add/witdraw whenever you like with same day transfer to my current account. I presume you can transfer to third party but have never done it. The rate is valid for balances fro 1-500,000 euro.
 
Get past the hysteria people, and (in my opinion) the ill-considered posting by Rabodirect. Personally I'm now going to consolidate my own account with that of my wife plus our joint account to maximise return. Watch this space - I'm sure other lenders will sit back, rake in the cash and cut their rates. Just because Rabo have opted to be the first, doesnt mean others wont follow..

I'm prepared to give them the benefit for a while and see what others do -they have been ahead of the game up to now
 
landlord said:
Just a reminder NIB are still offering an ECB tracker saving account at ECB + 0.5% which is 4.5% currently from 0 to 50,000 Euros, so after you have maximised your first active account and your partners you might want to consder this. It is instant access too. I am sure others can give examples of other banks offering better rates then Rabo too !!
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Rabo probably don't realise that people may simply switch, they probably have believe many won't be as savy with regards to rates.
 
It will be very interesting to see how Rabobank market this change in their rates.

I guess that they will only refer to the increase in their standard rate from 3.75% to 4.3%. Will there be any mention of the reduction in the rate (by an even greater amount) for deposits under €10k?

I have great respect for Rabobank and I hope they will be straight talking and upfront with how the change will effect the small saver.
 
Thanks Rabo. I certainly do not think you are ripping anyone off. Your rate suited me in 2007 and now that I know your 2008 deposit rate I will reconsider where my money will lie during the next year. I am disappointed that the 5% on the first 10000 rate has been discontinued and will be actively seeking a better home for my savings. Its now up to the other players in the Cash Deposits Market to make a play for new business.
 
I think people would be well advised to check the credit worthiness of Rabo compared to the other banks in business in Ireland. I understand it scores well ahead of the opposition with Moody etc.

Not to be treated lightly after the Northern rock debacle!
 
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