Savings rates - RANT

#1
Okay I have some money to save - not huge amount just a nice little chunk I can do without for the next few years.

I was looking for something that tracked the RPI or similar, rather than a fixed rate.

As it is I have found somewhere but in looking I found many accounts with the following details:

Interest rate - 0.60%
Notes - Rate includes bonus for first 6 months

How low can the rate be normally if there is a bonus included to bring it up to 0.60%...for crying out loud how can the banks say people aren't saving anymore when they offer rates like that...it's insane.

Saying that the nice people from NS&I (shocking myself by saying that the government may contain nice people) have a good deal going atm which I have taken them up on.

So this was just a rant at the banks who honestly haven't got a clue...

S_R

p.s. I'm feeling a bit better now, thanks.
 
#3
To be fair you can get a numerous variable mortgages for between 2.5 and 3% from the banks.
 
#5
Give it to me and I will pay you 10.3% pa and send you regular updates from my mansion on the beach in the Bahamas.

Signed

Bernie Madoff
 
#6
premium bonds may be worth a go. It's like a chavless lottery
I started a thread recently on just this topic; and I am only making some 3% pa. Yes, I could win the big one... and I could also be run over by a No 9 red bus. The chances of the latter happening are somewhat higher, IMHO!

By all means place, say 10%, of your funds in Premium Bonds but don't bet the bank on them!

Litotes
 
#7
I'm with you,the government are complaining that people aren't saving for their old age,WTF?
there are over 65's now,that are totally****ed because of the interest rates,they did save for their old age,and paid their taxes,and N.I.,and are now trying to live on a State Pension,and no income from their savings!

I'm sorry but the solution is easy,put the Bank Rate up to a decent amount,convince mortgage holders that it does hurt to have a mortgage,it's one of the sacrifices you have to make in your life,the other one is being responsible for and paying for your own kids,given the wages that are floating around now there shouldn't be a problem servicing a mortgage rate of 6-7%.

Just get rid of the second BMW,walk to school with your kids (It's healthier),only have 2 holidays a year,clothe the kids in what they need,not what they want,and no they don't need the latest mobile phone/tablet pc/games console/ trainers,and if they don't like it,tough you make sacrifices for the house,they have to endure a bit of pain as well,simples !

I'm off,back to my S**d
 
#8
I started a thread recently on just this topic; and I am only making some 3% pa. Yes, I could win the big one... and I could also be run over by a No 9 red bus. The chances of the latter happening are somewhat higher, IMHO!

By all means place, say 10%, of your funds in Premium Bonds but don't bet the bank on them!

Litotes
got some myself and it's suprising how often the small wins come up and I dont consider myslef all that lucky (looking at the wife)
 
#9
S_R,

Have you paid off your debts?

Simplified example: you have a £5,000 overdraft charged at 10% pa (I wish...).

That is costing you £500 per annum. As a basic rate taxpayer, you have to earn £625 to put £500 in your bank account (20% of £625 is £125).

You cannot earn 10% pa gross in the current climate without taking huge risks, so pay off your debts first!

Litotes
 
#10
I just bought 3.5k worth of diamonds (well, when I say diamonds, I mean Diamond, singular)

Gotta be better than savings at the moment.

If it all else fails then some lucky bint may wear it on her finger one day?!?
 
#11
I'm sorry but the solution is easy,put the Bank Rate up to a decent amount,convince mortgage holders that it does hurt to have a mortgage,it's one of the sacrifices you have to make in your life,the other one is being responsible for and paying for your own kids,given the wages that are floating around now there shouldn't be a problem servicing a mortgage rate of 6-7%.
Do you have any understanding what the raising and lowering of rates can do? Apart from paying more/less on savings?
 
#12
To be fair you can get a numerous variable mortgages for between 2.5 and 3% from the banks.
The headline figure might be 2.5 to 3% but please check the APR which are nearly all showing 4.5% or more. I am minded to fix my mortgage for 5 years and the 3.99% offered looks interesting but it has a £2k fee which brings it up to 4.6% APR!

Litotes
 
#14
Government Bonds generally have a good rate at the moment as they want your cash for obvious reasons. The down side is that your are normally fixed in for the term of the bond.
 
#16
Government Bonds generally have a good rate at the moment as they want your cash for obvious reasons. The down side is that your are normally fixed in for the term of the bond.
try the NS&I Index linked saveing bonds - RPI +0.5% you can sell up early although you won't get the full return, but you will get more than RPI...that's what i've done...at least i'm not losing on it.

S_R
 
#18
Do you have any understanding what the raising and lowering of rates can do? Apart from paying more/less on savings?
Yes,I do.

I started paying my mortgage in 1986,and at one time was servicing a £40,000 mortgage to the tune of £500 per month due to the high interest rates,I also put up with all the crap through the 80's/90's/noughties,the difference being I stuck to the Wilkins Micawber principles,basically no credit card,if I couldn't afford it I didn't buy it,I saved for anything we wanted,walked or cycled everywhere I could,oh and I also put my son through Uni at about £3,500 a year,he earned the rest by working part-time in the evening,so no I don't have a lot of sympathy for the winghing twats I see in the media.

I have a lot of sympathy for the over 60's because they are being seen off by banks,the government,the health services,and younger people at large,having actually contributed all their lives to the apparently bottomless pit of money now being used for the benefit of the 'next generation',but not for the benefit of the contributors !

Yes I confess,I do have a vested interest in the over 65's,I start to pick up my 'State Pittance',next year,oh well,back to the s**d ;-)

Forgot to mention,I don't drink,or smoke anymore,found I couldn't afford it and put my son through Uni,so it's all down to the 6 P's !
 
#19
Yes,I do.

I started paying my mortgage in 1986,and at one time was servicing a £40,000 mortgage to the tune of £500 per month due to the high interest rates,I also put up with all the crap through the 80's/90's/noughties,the difference being I stuck to the Wilkins Micawber principles,basically no credit card,if I couldn't afford it I didn't buy it,I saved for anything we wanted,walked or cycled everywhere I could,oh and I also put my son through Uni at about £3,500 a year,he earned the rest by working part-time in the evening,so no I don't have a lot of sympathy for the winghing twats I see in the media.

I have a lot of sympathy for the over 60's because they are being seen off by banks,the government,the health services,and younger people at large,having actually contributed all their lives to the apparently bottomless pit of money now being used for the benefit of the 'next generation',but not for the benefit of the contributors !

Yes I confess,I do have a vested interest in the over 65's,I start to pick up my 'State Pittance',next year,oh well,back to the s**d ;-)

Forgot to mention,I don't drink,or smoke anymore,found I couldn't afford it and put my son through Uni,so it's all down to the 6 P's !
My point being if rates rose,out of the people who are not saving now (or not enough), 11 or 12 million mortgage payers (+family)will still not be saving anything (Along with those with other debt but no mortgage).
Higher interest rates can mean a strengthening of the pound which can affect exports (and jobs and taxes paid to the country).
Businesses will have to pay more if they are in debt, which once again puts jobs and taxes at risk.

So its not a case of "the solution is easy". Raising rates can have a lot more consequences than just giving pensioners a better return. I'm sure they will be equally unhappy if there were less taxes to pay for increases in the state pension and health care, or if the goverment had to raise other taxes which will affect pensioners(like VAT) to pay for the shortfalls caused by companies going bankrupt.
 
#20
Whilst it's all very well ranting about low rates of interest on saving, it should be remembered that the same rates (or near enough) apply to borrowing. Given that most business investment (here meaning adding to a firm's ability to make more stuff) is funded by borrowing from banks, a sudden hike in the base rate would suddenly mean that such capital investment would dry up. This would lead to a decrease in the rate of economic growth if sustained in the long term, as if businesses are buying less machinery, then as the old machinery is worn out, it will not be as readily replaced (a simplification, but a valid one). This reduces the productive capacity of the economy, meaning that as a country we can't make as much stuff. Whilst there will always be exceptions and changes in macro-economic circumstances (the performance of the economy at large), I would argue that it is not a good idea to put interest rates up just yet. I agree that they must go up at some point (they can't exactly go any lower), but that point needs to be well timed to negate the possibility of the whole house of cards collapsing around our ears. Again.

Sorry that I've assumed little to no knowlege, but I've tried to make this as easy for someone with no experience of economics to understand. Hope it put things into perspective for a few people at least.
 

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