Bank of England - Rates down to 3%

pawpurrs

premium bonds have just come down I thought, my situation is that I am in the process of selling my house so although I dont have much to bank at the moment I may have in the future, and the lowering of interest rates will not be in my favour in this instance, although I was expecting it, so one that is only fixed for a short time would not be good as I dont have the money yet.
So I need one that I can open with little cash, but open to secure the rate, thanks for all your help, I am not that good with savings rates and what to do for the best.

anna42hmr

Malski wrote: »

It'll probably make premium bonds look far more attractive now.

i was thinking that too, but as martin pointed out on the show last nigh they have droped the interest rate on that too so now a lot less money is dished out in prizes, so some interest is better than nothing i suppose

typical ive just opened a couple new accounts (natwest isa - if the transfer is ever actioned at the rates its going god knows when the money will be in the isa and the sainsburys and tesco internet savings accounts, so no doubt they will take a hit on the interest rate!) why is it savers that are penalised on this as well

SunnySusie

mortgage rates and saving rates are actully remarkably decoupled from the base rate right now. Banks arent passing on rate reductions to mortgage holders becuase they are recouping bad debt costs. They are keeping savings high because they need to attract cash right now.

Time will tell how this all plays out. Interesting times.

pawpurrs

http://www.halifax.co.uk/savings/websaverreward.asp

This one looks like my best bet?

anna42hmr

SunnySusie wrote: »

They are keeping savings high because they need to attract cash right now.

.

fingers crossed you are right, but who knows, and a lot of the savings accounts cut rates after the last 0.5 cut (some even cut by more than this at 0.6 and 0.7) plus good deals are being cut, take the natwest isa for instance, the bonus was 2% for those transfering and after the last cut was slashed to 1.7 something, plus also cut the basic interest by 0.5

i am thinking one solution for those who cant tie money up like me, maybe is to have several savings accounts with small amounts in, that you can access money easy (ie allows you to transfer in and out quickly) and move money between those accounts depending on who is paying better interest rates at any given time??)

chardir

Malski wrote: »

It'll probably make premium bonds look far more attractive now.

NS&I's index-linked certificates are far more attractive - with interest rates low and inflation high they're a good choice. Ideal for recession-proofing your savings.

rb10

ought wrote: »

Halifax have a 12 month fixed at 5% with up to 4 withdrawals. I might go for one of those....

Better still, they have a 12 month fixed rate at 6%, also with up to 4 withdrawals. (You do need a regularly funded current account, but as that pays over 5% that's good too.)

See http://www.halifax.co.uk/savings/guaranteedsaverreward.asp

Rafter

pawpurrs wrote: »

Ok so I would have to look at bonds then?

Not all bonds are created equal and some with allow early withdrawals for some loss of interest.

Others will point blank refuse withdrawals such as the HiSave best buy currently.

Make sure you are maximising your ISA benefit, so at least any interest you do earn isn't taxed.

As others have suggested, if you don't need access to all the money short term, lock some away at fixed rates.

Good luck

R.

PS. For those with savings deriding the announcement today. Remember your savings are used to fund your children and grand childrens mortgages and businesses. Sure we are going to have to adjust to higher mortgage rates in the future, but if you demand higher rates now you will simply drive down house prices, cause businesses to fail, lead to higher unemployment and higher taxes for those with savings and income. So it is a big loop. You will lose in the end. Better that that pain is now and shortlived and people keep their jobs and homes rather than an even bigger mess to come.

nilrem_2

alchemistkevin wrote: »

I think this is a good decision. A very good and a very bold decision.
All of us are holding on our car purchases, house purchases and that's only driving the economy down.
This will get us to spend our money which is the No. 1 priority right now.
Savings will have to go towards the stock market as investments and that will drive growth too.
I'm happy will be happier if my lender decides to follow suit

Are you sure you are in the right Part of the forum? This is Savings and investments! Many people here depend on what interest they receive to live on.
They always seem to pander people with debt and do nowt to encourage people who are prudent and save, without savers where will they get the cash to loan to people? :eek:

A lot of people who depend on savings interest are retired or disabled and have no other means other than perhaps a state pension.

movilogo

mortgage rates and saving rates are actully remarkably decoupled from the base rate right now. Banks arent passing on rate reductions to mortgage holders becuase they are recouping bad debt costs. They are keeping savings high because they need to attract cash right now.

Banks have to pass rate cut to customers who are on tracker rate! :j
It's not banks fault that some customers decided to take fixed rates.