Scottish Widows Bank receives an honourable mention in the Moneyfacts survey, along with the Coventry building society, for its consistent appearance in the top savings tables over the past three years since it was launched.
The bank, which has this month located to Scottish Widows' new headquarters at Port Hamilton in Edinburgh, claims to have a business plan and a cost base that enables it to run at a profit while keeping rates very competitive. In contrast with Standard Life Bank, which last week passed the #500m mark after only five months, Scottish Widows Bank has built #300m of deposits in three years and is taking a net #12m a month.
Managing director Rob Goldburn said: ''We have aimed at niche markets but we don't just dabble here and there. Everything we do is consistent with the core business of the group.''
The bank's average deposit is #14,000 and it does not get involved in cheque and direct debit transactions.
''We decided first to avoid making products complicated. It makes life easier for the provider and customers always know exactly what they are getting. Second, on pricing we have never really intended to be the highest but aimed to be consistently near the top.''
The industry view is that the supermarket banks have used high early rates to net huge volumes of customers at a loss, with a view to selling them other more profitable products later.
Goldburn commented: ''There is going to be a very competitive market when they come to cross-sell. We have 75 members of staff and try to grow through systems improvements rather than throwing in more people all the time. The supermarkets' processing costs are pretty high and by the time they have paid for that and given 6.5% to the depositor they will be looking at a pretty big negative margin.''
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article