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Force up interest rates
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# 21
Blackdog
Old 08-12-2012, 11:04 PM
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Savings interest rates are only likely to go down further over the next few months. Banks are accessing cheap BOE/Government money so have no need to pay savers decent interest rates. The big question is when will we see the interest rates start to rise again - like everyone else I have no way of knowing but I suspect it will be at least another year before a rise.
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# 22
Thrugelmir
Old 08-12-2012, 11:09 PM
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That may be true but it seems a fairly good bet that with the economy in the current state and lending under pressure that rates are not likely to rise quickly or soon.
The BOE is intentionally holding down interest rates to promote growth.
"Bull-markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria."
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# 23
innovate
Old 09-12-2012, 8:08 AM
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Originally Posted by rb10 View Post
Other than ISA rates increasing very slightly during next year's ISA season......<snip>
I am beginning to think I wouldn't be surprised if we didn't see the usual ISA rate competition next April.
Give a man a fish and he can eat for a day. Teach a man to fish, and he can eat for life. Chinese proverb.

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# 24
marathon man
Old 09-12-2012, 9:01 AM
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I am being tempted by opening an account overseas to get a better rate. I guess that there are complications such as tax deductions, transfer fees and exchange rates but the rates are so much better.
For instance, ANZ bank in Australia is currently paying the rate of 4.35% per year for just 3 months: http://www.anz.com.au/aus/RateFee/In...ates/Rates.asp

I don't think that you can get 4.35% for a 5 year deposit here.
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# 25
jimjames
Old 09-12-2012, 9:50 AM
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Quote:
Originally Posted by marathon man View Post
I am being tempted by opening an account overseas to get a better rate. I guess that there are complications such as tax deductions, transfer fees and exchange rates but the rates are so much better.
For instance, ANZ bank in Australia is currently paying the rate of 4.35% per year for just 3 months: http://www.anz.com.au/aus/RateFee/In...ates/Rates.asp

I don't think that you can get 4.35% for a 5 year deposit here.
If you are prepared to gamble on exchange rates why wouldn't you just take out a S&S ISA here where you'll get nearly 5% income anyway? Genuinely puzzled why it is seen as an option to go overseas when better rates are available here for the same risk.

Obviously if you need/spend AUS dollars it isn't the same risk but if you need the money in sterling then there is a huge risk you are taking.
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# 26
Blackdog
Old 09-12-2012, 12:22 PM
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Originally Posted by innovate View Post
I am beginning to think I wouldn't be surprised if we didn't see the usual ISA rate competition next April.
I hope you are wrong but I have a funny feeling you might be right!
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# 27
Thrugelmir
Old 09-12-2012, 12:26 PM
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Quote:
Originally Posted by marathon man View Post
For instance, ANZ bank in Australia is currently paying the rate of 4.35% per year for just 3 months:
Are they offering the same rates in the UK?

How much would you lose in currency exchange fees.
"Bull-markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria."
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# 28
marathon man
Old 09-12-2012, 1:08 PM
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I haven't researched it yet but the rate is tempting.
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# 29
antrobus
Old 09-12-2012, 1:30 PM
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Quote:
Originally Posted by marathon man View Post
..
For instance, ANZ bank in Australia is currently paying the rate of 4.35% per year for just 3 months:...
That's nothing! You can get 22.50% on the Prominvestbank 1 Year Saving Deposit. (That's Ukrainian in case you're interested.)

Of course you'll lose a bit in fees and whatnot in executing the transfer. And then there's the exchange rate risk......
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# 30
innovate
Old 09-12-2012, 2:56 PM
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Quote:
Originally Posted by marathon man View Post

I don't think that you can get 4.35% for a 5 year deposit here.
You can get 3.9% for 5 years, complete with £85K FSCS protection. Basically risk free, and no faffing about with double taxation challenges or exchange rates.

Punjab National International.
Give a man a fish and he can eat for a day. Teach a man to fish, and he can eat for life. Chinese proverb.

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# 31
marathon man
Old 09-12-2012, 5:11 PM
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That's nothing! You can get 22.50% on the Prominvestbank 1 Year Saving Deposit. (That's Ukrainian in case you're interested.)
22.5% ?
Noted !
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# 32
sabretoothtigger
Old 09-12-2012, 5:26 PM
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Quote:
Originally Posted by innovate View Post
You can get 3.9% for 5 years, complete with £85K FSCS protection. Basically risk free, and no faffing about with double taxation challenges or exchange rates.

Punjab National International.
UK does have an exchange rate. The rate at which sterling exchanges for useful goods.

The exchange rate to oil, petrol, gas whatever fuel you need.

Are we trying to say these things are fixed because we stay at home. The risk is not free, it might be transparent to us but walking into a pane of glass can be painful this is not negated by our confidences in UK vs Australia

The risk taken is that in five years the exchange rate does not wipe out the interest given. It is quite a high risk.
ANZ on the other hand you have to risk not five years but can decide daily whether pull the money back?

Ukraine offers that much as they have higher inflation most likely. I will look up the history of both exchange rates.
The Asia pacific index invests largely in Australia, that is also my preference and they pay a decent dividend also. Anyone with business or holidaying down under probably has good reason to take the risk



Quote:
Originally Posted by Aristotle
“In effect, there is nothing inherently wrong with fiat money, provided we get perfect authority and God like intelligence for kings.” -
Quote:
Originally Posted by Ben Bernanke
modern macroeconomic policy has decreased the volatility of the business cycle.

Last edited by sabretoothtigger; 09-12-2012 at 5:28 PM.
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# 33
innovate
Old 09-12-2012, 5:28 PM
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UK does have an exchange rate.
Sure, but what does this have to do with GBP savings with Punjab National International? It's a UK bank.
Give a man a fish and he can eat for a day. Teach a man to fish, and he can eat for life. Chinese proverb.

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# 34
gadgetmind
Old 09-12-2012, 5:36 PM
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Originally Posted by jimjames View Post
I'd think very few people need to be 100% in cash.
I'm currently at 10%, which is the lowest I've been for a few years. This is split roughly 50:50 between NS&I linkers and term accounts paying about 3.6%.

As I've reduced cash, I've gone into a combination of high-yield equities, preference shares and a few corporate bonds.

As accounts lose bonuses during the next 12 months, I'll probably reduce cash further, but perhaps consider moving more into cyclicals.
I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.

Last edited by gadgetmind; 09-12-2012 at 6:02 PM.
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# 35
sabretoothtigger
Old 09-12-2012, 8:02 PM
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Quote:
Originally Posted by innovate View Post
Sure, but what does this have to do with GBP savings with Punjab National International? It's a UK bank.
You missed my point. UK imports goods, you buy those goods. You are subject to exchange rates even if you never leave these shores, your money must do so

Its possible to lose more money in sterling then by buying ahead now and taking the money abroad.
The speculation then is how useful each country will be, Australia is apparently important to China who we in turn buy alot of things from

Will that continue, will UK become more productive. The chances imo of strong sterling are really low, we are tied to USA in our likely fate.
Maybe if we were somehow ascending with closer links to Europe or something like emerging markets even. This governments tenure started with a brief attempt at that but Ive not seen any hope since
Quote:
Originally Posted by Aristotle
“In effect, there is nothing inherently wrong with fiat money, provided we get perfect authority and God like intelligence for kings.” -
Quote:
Originally Posted by Ben Bernanke
modern macroeconomic policy has decreased the volatility of the business cycle.

Last edited by sabretoothtigger; 09-12-2012 at 8:08 PM.
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# 36
innovate
Old 09-12-2012, 9:18 PM
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Originally Posted by sabretoothtigger View Post
You missed my point.
Yeah you are right, I am still missing it.
Give a man a fish and he can eat for a day. Teach a man to fish, and he can eat for life. Chinese proverb.

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# 37
sabretoothtigger
Old 09-12-2012, 10:53 PM
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I disagree when you said its risk free. It is simpler to stay in sterling and less effort but its not the lowest risk option

Bumping up the term to five years is really what makes it dangerous to presume that far ahead

People are better off paying off bills into the future as a way to increase security by reducing future costs. Since cash returns vs inflation have been negative in the past thats a reasonable option to fix a fuel bill or whatever can be done.

Its also likely future returns are negative also, taking 5yr and comparing it to now is a bad shortcut imo.
Quote:
Originally Posted by Aristotle
“In effect, there is nothing inherently wrong with fiat money, provided we get perfect authority and God like intelligence for kings.” -
Quote:
Originally Posted by Ben Bernanke
modern macroeconomic policy has decreased the volatility of the business cycle.
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