[…] this is a “tactic” to lower the cost of bank funding. Run a few accounts with a high marginal rate to attract those who currently have a lump sum and get good headlines, but keep the average rate paid low by penalising the inertia of existing customers.
Lloyds Group is a case in point. As a customer, I am now on my third iteration of their internet savings account; there must be plenty of people stranded in the low-paying original version. At the bank’s Cheltenham & Gloucester range, the tax-free ISA is paying 0.05% this year. Even though base rates are just 0.5%, one can only interpret the rate as a **** you message to their customers. On the Lloyds website, I counted more than 30 no longer marketed accounts; many of them with rates of 0.1%.
Not that I’d want to imply anything untoward, but my at-call account with HSBC Singapore is paying somewhere around 0.1% as well – and their much-touted Multi-Currency Savings Account pays a big fat zero. (It even pays zero on AUD balances below $50,000, which seems a bit tight-fisted when Rabobank and Bankwest are paying 3% or more post-tax.)
Now, granted, the MAS is selling cartloads of SGD to slow the currency’s appreciation against the USD, and that massive supply will send short-end yields lower (think of the interest rate as the price of money and you’ll see how that works). But… jeez.
Is it unreasonable to expect a bank not to send this sort of **** you message to its customers?
Canute’s exercise on the seashore was designed to persuade his courtiers of what he knew to be true but they doubted, ie, that he was not omnipotent. Don’t imply he was surprised to get his feet wet.
Also, on the difference between “may” and “might”:
Do not write George Bush might believe in education, but he thinks the people of Greece are Grecians. It should be George Bush may believe in education, but he thinks the people of Greece are Grecians. Only if you are putting forward a hypothesis that may or may not be true are may and might interchangeable. Thus If George Bush studies hard, he may (or might) learn the difference between Greek and Grecian.