Abstract
Overview
Introduction
Higher interbank money market rates, which have resulted from the credit
squeeze, are putting significant pressure on lenders to source funds. Unlike
some traditional banks, direct banks may more insulated because they have
large, fast growing deposit bases upon which to draw. This report explores
their offerings.
Scope
- Presents a comparative analysis of variable deposit rates of direct banks,
high street banks and building societies;
- Presents a comparative analysis of fixed deposit rates of direct banks,
high street banks and building societies;
- Compares the features of variable and fixed rate savings products offered
by UK-based direct banks.
Report Highlights
Between June and December 2007, Smile has consistently offered lower rates
than its competitors, while Sainsbury' s Bank has been the most consistent
market leader by rate, with the exception of the months of July and August
when Tesco offered the best rate, and November and December when the AA took
the lead.
A comparison between rates of high street banks and the accounts of direct
banks suggests that, among traditional banks, only Abbey and, to a lesser
extent, Lloyds TSB, are holding their own against their newer rivals.
A comparison of average rates across the three categories of providers reveals
that high street banks have consistently offered the highest average fixed
rates, although since November, the gap between their average and that of
rival direct banks and building societies has been narrowed.
Reasons to Purchase
- Assess the competitive threat posed by direct/online savings banks;
- Benchmark your pricing and product propositions;
- Use our insights to plan your strategies for targeting deposit customers.
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