Interest rates puzzle

[Ethel]

I have several thousand pounds in a savings account and have been looking to move it to a higher interest rate.

Coventry Building Society rates are fairly dismal. But their highest interest rate with instant access is the current account, with a limit of �250,000.

Why on earth should that be? A current account must cost the bank a lot more than a simple deposit account, simply because there would be more credits, debits, cheques, standing orders and so on to process.

And this is typical of all the banks and building socities. Hope somebody can explain this.

[WendyS]

Ethel - from reading previous posts of yours when you have offered excellent financial advice to others, you're obviously financially competent, and I share your puzzlement that a Building Society current account should offer the highest interest rate when it has all kinds of admin expenses attached to it. I think the only thing all of us can do, if we have the time to do the research, is become "interest rate tarts" and hunt around on the internet for the best rates available. In the past I've often had a sense of loyalty to the organisations I've invested money in, but now I'm retired and on a pension, I've decided to become ruthless about getting the best savings rate available. (And already I've today e-mailed all the organisations I've got my modest savings invested in, asking them when they're going to increase their interest rates as a result of the Bank of England interest rate rise). I think we consumers have more power than we realise if only we collectively exerted it.

[Ethel]

I think you and I are from the same mould, Wendy.

I am very much a rate tart, a great fan of Martin Lewis and enjoy being able to move money around at the click of a computer key to get the best deals.

So much easier to get the information these days, and move money too.

Hurrah! for the interest rate increase. :)

[WendyS]

Yes I'm a great fan of Martin Lewis too. Always avidly read his communications. Not all his advice is relevant to me but I enjoy reading some of the comments in the forums too, although I haven't yet grasped the knack of how to contribute to them. I confess to amazement at how many individuals today can live with their credit card debt levels when it has been caused by "retail therapy". I've always lived on the premise that you saved up first and then bought something when you could afford it. Old fashioned perhaps, but at least it allows me to sleep at night . It seems to be a matter of differentiating between "Must have" and "Nice to have".