Is it worth going for a fixed term rate now?

ashbourne

Hi,

With interest rates predicted to go down now should i be looking at doing a fixed term rate?

Is it likely that the easy access rates would be cut quite drastically with the rate cuts or would they hold up to get business?

Also, i had an isa with Icesave and was wondering how i go about using this now Icesave has now finished. Do i just open a new one with another bank or do i have to wait until the Icesave situation is resolved?

Thanks for any help.

Stavros_3

Absolutely Yes, rates predicted to be around 2% by next summer, the higher and longer rate the better, if you can pick up a 2 yr rate around 6 - 6.5% then go for it.

http://www.moneyfacts.co.uk/savings/bestbuys/long-term-fixed-rate-bonds.aspx

Baldur

ashbourne wrote: »

Also, i had an isa with Icesave and was wondering how i go about using this now Icesave has now finished. Do i just open a new one with another bank or do i have to wait until the Icesave situation is resolved?

If you have already paid into the Icesave ISA since 6th April, you can't open & subscribe to another Cash ISA - you'll have to transfer the Icesave funds whenever the FSCS process to safeguard the tax-free status of your Icesave ISA funds is resolved.

ashbourne

Thanks for that.

I have read that on some fixed rate accounts you can still deposit after the initial deposit. Would i still get the same rate of interest on these subsequent deposits?

which one are the best for it?

Stavros_3

If is 7% fixed for 1 year and allows further deposits then you get 7% fixed at the end of the 12 months on the full amount

Reaper

Stavros wrote: »

If is 7% fixed for 1 year and allows further deposits then you get 7% fixed at the end of the 12 months on the full amount

Just to clarify - Stavros doesn't mean you can put £1 in now and then add £10,000 just before the year is up and expect to earn 7% on the whole lot. Later deposits will earn less simply because they have been in the account for less time, even though they earn the same rate of interest.

Forgive me for stating the obvious but it is surprising how often people contributing to "regular saver" accounts misunderstand this and complain they have been swindled on their interest payments.

Hungerdunger

Stavros wrote: »

Absolutely Yes, rates predicted to be around 2% by next summer

Does this forecast refer just to the BoE Base Rate, or are you predicting that savings accounts in general will be down to around this level.

Stavros_3

Reaper wrote: »

Just to clarify - Stavros doesn't mean you can put £1 in now and then add £10,000 just before the year is up and expect to earn 7% on the whole lot. Later deposits will earn less simply because they have been in the account for less time, even though they earn the same rate of interest.

Forgive me for stating the obvious but it is surprising how often people contributing to "regular saver" accounts misunderstand this and complain they have been swindled on their interest payments.

Thanks for that Reaper, yes on re-reading my post it could be slightly misleading, well spotted

Stavros_3

Hungerdunger wrote: »

Does this forecast refer just to the BoE Base Rate, or are you predicting that savings accounts in general will be down to around this level.

I'm not predicting anything, as I'm no expert, it is the financial analysts and experts who are. If the Base rate falls to 2%, then savings rates won't be that far behind. They would have to because they would be cutting rates for borrowers and would be losing out to investors if they kept their saving rates high