The UK Financial Conduct Authority has taken the big four banks to task because they have set their savings rates too low, to the detriment of customers.
A paltry return on savingsWhen the Financial Conduct Authority (FCA) has to publicly shame the big UK banks because their pitiful easy-access savings rates for customers are between 0.7% to 1.35%, then you get an idea of how badly the banks are treating their clients.
At a time when the Bank of England has only recently raised the base rate again from 4.5% to 5% there is absolutely no excuse for the banks to continue to give their customers such a paltry return on their cash.
HSBC, Natwest, Barclays and Lloyds are the big 4 banks in question here, and according to Reuters, the top brass from these banks have been invited to the FCA on Thursday in order to discuss the issue.
Reuters quoted a person familiar with the FCA’s position who said:
"We do think there is more value that can be provided to consumers, we are not happy with some of the lower savings rates we see, and we want banks to be supporting customers . . . and people to be able to make informed choices,"
With UK inflation staying at 8.7% for the second month in a row, consumers are up against it. Food inflation is around 30% and with the average 5-year fixed mortgage rate above 6% the UK economy is starting to scream.
In this kind of environment, for the banks to be just looking out for themselves is grossly wrong. These are the banks that are judged as too big to fail, and will get bailed out/in if/when they get to the point of collapse.
The question has to be asked: Why would anyone with any extra money put it into a bank? The official inflation rate of 8.5% is well over 10% if you take into account how items included in inflation are manipulated over the years.
Therefore, to receive around 1% for savings that are losing around 10% a year does not make the slightest bit of sense. The only way the banks are able to get away with this is because people are just not informed as to how they can best deploy their savings.
An alternativeOn that note, Bitcoin rose more than 100% since the beginning of the year. There is no guarantee that this will continue, and there is a lot of volatility in what is still a very tiny asset class.
However, the investor has to make a choice between a fiat currency that will go to zero with 100% certainty, and Bitcoin, which is the scarcest and most secure asset in the world. Anybody who might think to make this choice should educate themselves fully on the matter.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
