Rabo

[penguin]

Any reason why Rabo have over the last couple of years dropped their interest rate on term deposits to almost unconpetitive rates?

 

[canicemcavoy]

I imagine because they don't need to since, as a triple-A rated bank, a large amount of people have moved deposits to them.

 

[penguin]

thats was my theory but was wondering was it the general consensus.
they must be doing "well" so as its VERY low.

 

[marksa]

The Irish domestic banks are paying unrealistically high rates because they are desparate for cash at any price. Rabo, and a number of the other foreign banks which are well capitalised and well funded in the interbank market do not need to pay up, so they just pay rates similar to interbank rates for deposits.

And with even the Irish government potentially getting a further rating downgrade, which would you rather have your money with -
1) an Irish bank rated A3, with a limited government guarantee of Aa3, or
2) a foreign bank with a AAA rating like Rabo, or Aa3 like Danske (NIB).
There's only so much of a risk/reward equation to balance here. Higher risk of default from Ireland compensated in part by a higher rate of interest received.

 

[Lightning]

Why re the returns so low? because they can get away with it.

Rabo use their safety card on one hand to offer low returns to their customers on the other hand.

NR have an AAA parent and offer better returns.