The Rates

The_MoneySavingKid

oh so depressing..
I am new to this all,and learning the effects etc. ie.Interest Rate drops which causes the Savings account rates to fall.
I am quite annoyed to be entirely honest..I am 16 next month (and am praying the 10% account I have my eyes,doesn't fall) and was planning on opening an ISA.
But I wanted to know,what has to happen for the saving rates to return to the great rates they were before?
I also have another question.
When I turn 16,do I have to pay tax on savings or is that at the age of 18 years or does it rely on a certain income?

sabretoothtigger

Tax free income is the same at 16 or 18 and you can receive thousands before paying any tax, its classed the same as job earnings

Banks will need deposits for years to come so I think you will get interest enough

Reaper

High savings rates are not necessarily better than low savings rates.

I know that sounds crazy but what really matters is the difference between what you get and inflation. If inflation is 2% and you earn 4% that is better than inflation being 9% and your savings earning 10%.

If you get yourself a mortgage in the future you then you have to think of that too when working out if you are getting richer or poorer. If your mortgage is bigger than your savings (true of most people) then when interest rates go down you are better off.

Of course you can try to adjust things in your favour - opting for fixed rates on your savings when rates are high and fixed rates on mortgages when they are low.