Kaupthing Edge – the failed bank that’s now reacting (sadly)
It’s not so long ago that I wrote about failed bank Kaupthing Edge, and the fact that it’s new owners hadn’t reduced interest rates, nor removed its high paying fixed term rates for existing customers.
I’d presumed the logic behind that was because they were busy clearing up a mess of missing transactions from when the bank was put into administration.
That clean up has now ended, and notably Kaupthing Edge’s website no longer allows the creation of new fixed term deposit. Oh and they’ve dropped the interest rate down by 2% – matching the two recent Bank of England rate drops. The change happened last week, effective 7 November – the day after the Bank of England base rate dropped. A very fast reaction to the cut which makes it look like ING are after a bit of payback for the fact that rates weren’t cut in October.
In contrast, ING have yet to cut their own interest rates following the Bank of England decision. No doubt they will at some point, although that leaves an interesting question – what’s the lowest savings rate the banks (any bank for that matter) can justifiably go to, before the public decide to stop hoarding cash and just spend it? Given the current desire of banks to hoard cash, that has to be a question the banks will be asking themselves…