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Are the banks short of capital? I ask this because I saw two rather unexpected things this morning (well, I could say three unexpected things, in that $2000 mysteriously reappeared in my Citibank account, but I'll come back to that later).
The first was when I went to make an overpayment on my mortgage. First the nice lady told me that there was no longer a ten quid charge for capital overpayments, and then she told me that I could pay back up to 20% of my loan without penalty this year rather than 10%.
Now this is a mortgage on which I am paying 5.89% fixed for another five years. Given the current outlook on interest rates, allowing me to pay off more without penalty (and without an admin charge either) strikes me as a sign that Lloyds TSB is absolutely desperate for more capital. This isn't because it's broke. I presume it wants the capital because it wants to lend more. It may also have regulatory concerns. Whatever, I am in effect being offered the chance to invest an extra £23k at 5,89%, tax free. All I have to do is find the £23k to invest (with the view that this is a completely illiquid investment -- there's no getting it back if I need it).
So, the bank allows me, a reliable borrower who is contractually stuck with a high rate, to pay off capital without penalty, so that Lloyds TSB can lend out to other people at a lower, variable rate, who might be less reliable borrowers. Go figure.
And then, while walking back up Moorgate, I saw a NatWest promotion of "transfer your cash ISA to us and get a 12-month bonus". The devil is in the detail here, obviously. A 12-month bonus on 0.1% wouldn't be worth much, and a 12-month bonus on a tenner of your £20k transfer also wouldn't be that attractive. But my hunch is that it's a genuine, generous offer, and all part of the banks' desperate push to pull in some cash.
+++++++
Nothing to say on the budget yet until I can look at the small print on the Treasury web site. There's about 10Mb of small print, actually.
However, the third unexpected thing that happened to me today was when I went to get some money out of Citibank (£200 = $299.20 -- woo hoo!). As usual I got my printed receipt, and was somewhat surprised to see $2000 more in the account than I expected.
Oh gawd, I thought.
So I went to the bank teller, and asked her to tell me what had happened.
Yes, there's a note saying that the cheque that I paid in on January 26th, which Citibank told me at the beginning of March was lost, had now been "recovered". That means that it's in my account. It's even in my account as "funds available for withdrawal". However, as I now know, this is no guarantee that Citibank won't take the money back out again.
You see, I've told Pacific that the cheque was lost, and I've asked them to tell Cassava to tell Bank of America to stop the cheque. I can email Pacific tonight and tell them to cancel the stop order (alternatively, of course, I could do nothing!) but it all seems to depend where the money is "in the system". Either the stop order will go through (in which case Citibank will once again pull the money back out of my account), or it won't (in which case, theoretically, it should stay in my account).
Other possibilities are that the money will sit in my Citibank account and also reappear magically in my Pacific account, or that the money will be withdrawn from my Citi account (again), but won't return to my Pacific account. So I'm on what Gianfranco Zola might call "a genuine four-pointer". Let's hope that I end up on the Wolves side of the deal rather than on the West Ham side.
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The first was when I went to make an overpayment on my mortgage. First the nice lady told me that there was no longer a ten quid charge for capital overpayments, and then she told me that I could pay back up to 20% of my loan without penalty this year rather than 10%.
Now this is a mortgage on which I am paying 5.89% fixed for another five years. Given the current outlook on interest rates, allowing me to pay off more without penalty (and without an admin charge either) strikes me as a sign that Lloyds TSB is absolutely desperate for more capital. This isn't because it's broke. I presume it wants the capital because it wants to lend more. It may also have regulatory concerns. Whatever, I am in effect being offered the chance to invest an extra £23k at 5,89%, tax free. All I have to do is find the £23k to invest (with the view that this is a completely illiquid investment -- there's no getting it back if I need it).
So, the bank allows me, a reliable borrower who is contractually stuck with a high rate, to pay off capital without penalty, so that Lloyds TSB can lend out to other people at a lower, variable rate, who might be less reliable borrowers. Go figure.
And then, while walking back up Moorgate, I saw a NatWest promotion of "transfer your cash ISA to us and get a 12-month bonus". The devil is in the detail here, obviously. A 12-month bonus on 0.1% wouldn't be worth much, and a 12-month bonus on a tenner of your £20k transfer also wouldn't be that attractive. But my hunch is that it's a genuine, generous offer, and all part of the banks' desperate push to pull in some cash.
+++++++
Nothing to say on the budget yet until I can look at the small print on the Treasury web site. There's about 10Mb of small print, actually.
However, the third unexpected thing that happened to me today was when I went to get some money out of Citibank (£200 = $299.20 -- woo hoo!). As usual I got my printed receipt, and was somewhat surprised to see $2000 more in the account than I expected.
Oh gawd, I thought.
So I went to the bank teller, and asked her to tell me what had happened.
Yes, there's a note saying that the cheque that I paid in on January 26th, which Citibank told me at the beginning of March was lost, had now been "recovered". That means that it's in my account. It's even in my account as "funds available for withdrawal". However, as I now know, this is no guarantee that Citibank won't take the money back out again.
You see, I've told Pacific that the cheque was lost, and I've asked them to tell Cassava to tell Bank of America to stop the cheque. I can email Pacific tonight and tell them to cancel the stop order (alternatively, of course, I could do nothing!) but it all seems to depend where the money is "in the system". Either the stop order will go through (in which case Citibank will once again pull the money back out of my account), or it won't (in which case, theoretically, it should stay in my account).
Other possibilities are that the money will sit in my Citibank account and also reappear magically in my Pacific account, or that the money will be withdrawn from my Citi account (again), but won't return to my Pacific account. So I'm on what Gianfranco Zola might call "a genuine four-pointer". Let's hope that I end up on the Wolves side of the deal rather than on the West Ham side.
_______________________
