Roel has got his point there. There is always some catch with these offers. I remember my switching from AIB current account to AIB High Interest Current Account a few years ago. Seemed like a great idea, but unfortunately I haven't noticed any "High Interest" being lodged to my account. I probably overlooked one of those tiny sneaky stars at the bottom of the last page explaining that it is not so great after all.

When I was browsing through the previous posts and comments I was amused by the way people were complaining about the rates. If you don't like the bank, you just take your money and go to someone else. As simple as that. You can't actually force the bank to increase the interest rates. They are very closely connected to many macroeconomic factors such as the level of inflation and overall financial situation, and banks can only operate within certain limits. And if the inflation is low, you can't expect any bank to have a 10% savings account. If you want your money to earn a better rate of interest, you can even check different countries (provided that you have time and patience) and find better offers. But then again the interest rates will be higher because of the higher inflation level in a given country. I'd say that the main function of savings accounts is to protect your money against inflation. If you want to make profits, you have to turn to other financial instruments. They say that bank A has 4% or that bank B has 5%. Even if it was true (I mean without all those sneaky terms&conditions), you wouldn't get much. If you lodged 10,000 Euro you would get extra 500 Euro in 12 months (and you would still have to pay tax on that 500).

I just think that RaboDirect savings account has everything that a good savings account should have: accessibility, simplicity, rate protecting against inflation, transparency and no sneaky conditions. Don't forget it is a savings account, it won't multiply your savings by 3 within 12 months.

Regards,
Arek

I agree on this.

Ads like this aim to deceive and display the typical conniving attitude of Irish banks.

Classic example is extending the time period and so bumping up the rate paid. Example, 3% over 12 months becomes a magical 4.5% over 18 months.

Any better value? No.

Good on you Rabo for saying it like it is. But go easy on the marketing. You made your point, so most of the last paragraph was somewhat unnecessary.

"If, on the other hand, you want peace of mind, a simple product, 24/7 access to your money and a decent rate, RaboDirect is a good place to be. When you compare our rate and the associated product features and benefits and its simple terms and conditions, we’re still offering one of the highest rates in the market."

Rabo is offering rates at least 1% below that readily available on little or no strings attached accounts. They get away with it because of inertia - but eventually people will wake up, and then it will be very difficult to maintain or regain your reputation.

Hi Pat, Thanks for your comment. Actually if you look to the whole ‘package’, rates, ease of use, solidity of the bank offering the product, I still think that there are no other offerings out there matching ours. But that wasn’t really the point of my blog post. The point I was making was that promotional rates continue to litter the Irish savings market. Their terms and conditions make it increasingly difficult for people to understand exactly what’s on offer. And as a result, it’s extremely difficult to make genuine, transparent comparisons across products. rgds Roel

There is a lot to be said for "what you see is what you get"

They might be fooling some people but I don't think they are fooling me. I don't see any problem with most of the offers of the other banks. Bank A's 7% on 2,000 euro for 2 minutes of my time every month transferring 1,500 in and out? Great! I do the transfer, keep 2,000 euro that I don't need, move the 1,500 out et voilá. I'm sorry, but that's a great offer. Bank B's 4% for 6 months, no interest paid if I need to withdraw money. What's wrong with that? It's better than a fixed term deposit and even if you have to withdraw money half of the time, you'd be getting as much interest as in Rabo. After the initial six months the rate is still very attractive and again, you'd be getting more interest than keeping the money in one account.

I'm a client in Rabodirect but, I'm sorry, your rates are appalling at the minute. I'm just using other accounts to get the maximum interest possible for my money.

You guys in Rabo need to consider seriously increasing your rates, because they are not very competitive anymore. I understand your claim of AAA credit rating but, in this climate, where banks need financing to recapitalise their beleaguered balance sheets, customers need to demand more.

Regarding savings accounts and all the T&C's involved with your competitors, i find you quite hypocritical! Yes all banks have terms and conditions on all of their products as do you (as per your Tweet on June 17th) Some more than others. Personally I find Ulster bank notorious for ridiculous terms and conditions. However the likes of the triple 35 account is transparent. It is upfront that the minimum balance required is 10k and it is a notice based account-it's even in the name (35 days notice!) Is Rabo direct ever going to stop the scare-mongering and selective posts regarding their competitors and actually be "straight talking???"

Hi Jules,

You are right, some T&C’s are clearer than others and by no means was my list complete.

However, I am surprised at your comment about RaboDirect not being straight talking! As far as I know, so far we are the ONLY bank in Ireland actively engaging with customers and the public, providing an open forum for you to air your views. Good or bad, we’ll post and reply to both. Hardly non straight talking behavior now, is it! We’re not scare mongerers. We’re about offering transparent products that are easy to understand. Our experience is that when you compare our simple product with some of our competitors products, they’re never as transparent or as easy to understand. That’s a fact. Again, we’re just being straight talking.

rgds
Roel

Personally I don't think there's anything wrong with, for example, the first offer. If you're stupid enough not to read the terms of getting 7% on your current account balance, well then you deserve to get 0.1%! The simple fact is that the 2k I have sitting in that current account earns as much as 7k sitting in Rabobank! No problem and no cost with doing a standing order in an out every month.

During 2007 Rabobank introduced tiers to their rates, which I have to say I don't think was made very clear at the time. The result was that I thought I was getting 5% on my balance, but in fact getting 5% only up to €10k; the rest was at 3.75%. Sneaky?! You can't pick and choose which terms and conditions to ignore and which to criticize!

I'm all up for the 'straight-talking', but is bashing other banks really the best way to get your message across?!

Regards, G

Hi Cliente,

Thanks for your comment and I guess you prove my point .

So sure, if you have loads of free time to spare to browse all offers out there …want to check on an almost daily basis if you are still within the range of the Terms & Conditions of the various products on offer…want to check on the safety of the banks offering them… don’t believe in the value of ratings…don’t mind banking with a bank which can only survive with government support then yes…there are better deals out there.

I just think there are better, more transparent, simpler ways to advertise bank products……..

With regard to your comment on rates and beleaguered balance sheet I guess the whole point is that that is NOT applicable to Rabobank. We have one of the highest capital ratio’s in the world, have no difficulty in getting finances in, see my blog post of January 13 and are solid as a rock.

rgds
Roel

If Rabo are so transparent why is it so hard to find out the interest rate on my account. Every other piece of information is easily available except the interest rate

Hi Barry,


Thanks for the comment. You can see our On-Demand Savings rate in a number of prominent locations on our website.


For example:

• RaboDirect Homepage www.rabodirect.ie (on the orange Savings button)
• Savings Homepage http://www.rabodirect.ie/savings-ireland/default.aspx
• On-Demand Savings product page http://www.rabodirect.ie/savings-ireland/on-demand/default.aspx
  

I totally agree with cliente, whats the harm in putting €1500 a month into your current account, sure I get paid more than that anyway. Rabo your rates are really bad and need looking into.

Hi H-Bank,

Please refer to my comment on 25-06-2009 04:19.

rgds
Roel

People should consider starting their own personal bank under their beds, or just blowing whatever few shekels that they can muster together these days, after being savaged by developers, bankers and the government; instead of throwing it back at the bankers to lend out at up to 5 or 6 times the rate of interest they are prepared to pay for "savings" ;) LOL

Instead of rewarding its loyal customers with decent interest rates, Rabobank rewarded itself to the tune of €2.75 billion in profits across its 5 market segments ( before write downs of course - BOO! HOO! :( ).

Who are they fooling? It's not you, is it?

Neither of the above Roel. Of course I think that you should make a profit. Overexposing your customers to unnecessary risk is an internal matter for yourselves to deal with however you see fit. But I don't think that ordinary savers should have to pick up the tab for mistakes made by the banking industry. After all, domestic retail banking is your bread and butter, and you should be treating your regular savers with a little more goodwill. After all, if a run started on your bank, wher would you be; not in your cushy leather swivel chair anyway I suspect.

I do think that with everybody feeling extreme financial hardship, the very institutions that caused the global financial downturn through its insidious greed, could spread the benefit of its profits more favourably in terms of the interest rate it offers investors; rather that spending its time trying to 'slam dunk' the opposition by bad-mouthing their savings schemes (that goes for all banks not just yours).

I am all for profit, I think that prudential investment deserves reward, and i'm quite sure that your savings account holders feel exactly the same way. The capitalist model has clearly failed, and will never return to what it was. The day is over for the 'fat cats', and the time is coming for the voice of the public to be heard. Look around you; the disquiet is almost palpable on the streets of this nation; and i'm pretty sure that it's the same throughout the rest of Europe, if not the world.

Don't keep trying to distract attention from the crummy interest rates offered by all of your savings schemes by claiming to be 'up front' about things, when someone had to point out the level of profit your holding company made last year.

... and no, I don't have any link with the financial industry; this is merely an opinion being expressed by almost half a million people, whom are probably starting to find it difficult just to put food on their table

... so get a grip!

Agree Roel with the thrust of your post - however am willing to lock in some cash and have been looking at the Triple 35 product that you mention, found it fairly clear (when I went to compare to locking with Rabo, there didn't seem anything comparable/better) - having just looked around, what annoys me most is the headline rate that only applies to a relatively small amount

Hi John,

Now I am getting confused….You suggest it’s better to make no profit, over expose the bank and it’s clients to risky investments and get bailed out with yours and my tax money???

Related to the size of Rabobank group, the profits are very reasonable. We do not have external shareholders so all profits are retained in the bank. This creates a very high capital base which means our clients don’t have to worry about the stability of the bank and of their money.

rgds
Roel

I like the transparency of this blog and how you publish the negative comments and reply to them. However I would have to say that many economists are now saying that the recession may have bottomed out (albeit that a painful recovery period lies ahead). The deposit security issue becomes less troubling with each day that goes by, Rabo really ought to provide an incentive to customers to stay with the Bank as the current interest rates are making me seriously consider pulling my funds. The ease of access and clear T&C are the only things keeping me as a customer for the moment. I really am not happy with the rate of return, particularly considering the increased burden of DIRT tax.

Rabo, YOU CAN HIDE BEHIND KNOCKING OTHER BANKS THE FACT REMAINS THAT SINCE YOUR ENTRY TO THE ROI MARKET YOUR RATES HAVE BEEN PROGRESSIVELY REDUCED EVEN TAKING INTO ACCOUNT THE CENTRAL BANK REDUCTIONS IE THE GAP BETWEEN YOUR DEPOSIT RATE AND CENTRAL BANK RATE HAS CONSISTENTLY NARROWED.I USED TO SAVE SOLELY WITH YOU BUT NOW FOLLOW THE BETTER RATES. I TOO HAVE A HALIFAX CURENT ACCOUNT AND IF YOU FOLLOW THE STRAIGHTFOWARD SIMPLE CONDITION EARN A COMPETITIVE 7%. YOUR 2% RATE IS VERY POOR CONSIDERING ITS AN ONLINE ACCOUNT AND THEREFORE YOU HAVE NO BRANCH COSTS TO YOU ASSOCIATED WITH SELLING THIS PRODUCT.(I DO NOT WORK FOR ANY OTHER BANK BY THE WAY).

Thanks all three for your feed back. And thanks for your positive remarks on having a blog like this and supporting the main point of my last post, namely that I feel headline rates presented in cheap and old fashioned advertising tricks is not helping anybody.

On the rate issue, much has been said already. I am afraid low rates are a fact of life for the time being. With ECB rates at an all time low, high saving rates are just not on the cards. The flipside of that is that mortgage rates have gone down too. I do understand the frustration about lower returns, but increasing the rates would just lead to further vulnerability of the banks, which is not great for anybody.

@John, I cannot agree with your generalization of all banks, bankers and your remarks on the capital model. I do however think this banking crisis, although painful, was necessary to clean up the extreme practices that entered the banking industry. And we need to go back to a simple and effective banking model again.

@ Joe, thanks, I do not suggest we have the highest rates out there. I do maintain that if you look at the type of product, it’s flexibility, 24/7 access, almost no T&C’s, layered structures, limit amounts to deposits, etc, back by a triple A rated bank that our rate is good for our On Demand savings product. Next to that our Longer term (3 years and up) Term Deposit rates are amongst the highest in the Irish markets. Next to that if you still not happy you could consider our broad offering in investment funds.

I agree with the comment by H-Bank and the 7% interest rae - I also lodge the €1.5k per month and transfer it back out after, leaving €2k to earn the 7% interest.

On the subject of honesty and transparency, I am amused at the Rabobank/Rabodirect claim to be just that. As interest rates were rising in the Eurozone via the ECB a couple of years ago (or less), RaboDirect didn't increase it's interest rate by the same amount claiming their rates were not linked to those of the ECB. Yet, whenever the ECB reduces its rates it does so bacause the ECB has done so. There is no transparency in this rationale!!!

Hi Henry,

Being straight talking is at the core of what offer. We take being as transparent as possible in how we communicate and promote our products, very seriously. If you have suggestions around how we can improve our transparency, please let us know. After all this is why we were the first bank in Ireland to setup a blog so we can engage in these conversations. Maybe you can give some examples/comparisons of how other banks in Ireland are more transparent. We will certainly take your feedback on board. But we will fall short of publishing our business plan 

Regarding on-demand savings rates, well they change for a number of reasons and the primary reason for our rate changes over the last few months is due to the ECB rate reductions. We have always offered a competitive rate in comparison to the ECB rate. Our rate is still above the ECB rate however unfortunately it does not look like a good rate when compared to some on the rates on offer in the Irish market. Most banks are now in need of raising deposits so they are willing to offer higher on-demand rates to attract more money. These products are most likely loss making. Due to some prudent decisions of the last couple of years we are one of the healthiest banks in the world and have not needed tax payers money. We want to continue on this path and ensure the safety of our deposits money along with offering a decent rate. We are actually offering one of the highest 4 to 5 year terms deposit rates and when comparing apple with apples our on-demand no strings savings product is also one of the highest out there.

Trust me, my life would be a lot easier if we could offer the highest rate in the market for all our savings products. I know this is not what you want to hear however we feel we offer a transparent, uncomplicated savings products, with no sneaky terms and conditions  If you want higher rates then yes you can find them elsewhere. I personally believe there is more to choosing a bank than the headline rate on offer.

Thanks again for you feedback.

Roel

I take what you say about promotional rates. However, I can still get 3.5% on my savings guaranteed by the British government, and 3.75% on my savings guaranteed by the Irish government. No sneaky terms and conditions in any of these accounts/

That is a lot more than the 2% RaboDirect is now offering. Indeed, had you kept your rates higher I might not have moved my money out of RaboDirect.

Although one can only get the 7% on up to €2000 euro with a certain institution, it is still better than the 2% I would get with RaboDirect.

Pot calling the kettle black eh? Back in 2006 Rabo were all to happy to offer promotional rates. No matter what spin you put on it Roel, your rates are crap. I have to laugh.

Pot calling the kettle black eh? Back in 2006 Rabo were all to happy to offer promotional rates. No matter what spin you put on it Roel, your rates are crap. I have to laugh.

Hi Stephen,

Glad we could make you laugh! But I think promotional rates are no laughing matter. What is wrong, is non transparent advertising when it comes to promotional rates.”
As to your comment on our rate, sorry, but they are not that bad. Please compare apples with apples and you will find that there are not too many better rates out there for the same product, with almost no T&C’s, backed by one of the safest banks in the world.

rgds
Roel

Rates are so low everywhere, will it REALLY make a big difference to move your money to a bank with a 1 or 2% higher rate? Surely surely the guarantee that your money is SAFE is a lot more important?? I think Rabo have been very fair, all their rates are TRANSPARENT unlike other banks with hidden terms and conditions and by god there are a LOT of them out there.

At the end of the day, all these products are marketed
towards your average irish joe, the boys with the big cash
know where to get the best returns.

1 or 2% differences on savings of say 20k are negligible,
and you are better off spending your time on education (on maths) than hunting down the best deal.

Rizzo is right, the actual cash value of the difference between 1 or 2 % on €20,000 savings over a year, LESS DIRT, is €150.
So yes it's a bit more but I'm quite happy to know that RaboBank and my money will still be there when that year is up!!

www.itsyourmoney.ie is a good reliable source for comparing what is on offer on the market.

My money is in Anglo @5.5% right now, although I expect that rate to drop again soon.

Great to see people actually reading the blog. Keep up the good work.