variable savings rates to plummet (Bradford & Bingley)

blackswan2

I've moved house recently and put money into various accounts fixed and variable, we want the money in 12 months time.

Some money is in a B&B eSavings account (issue 3) and the variable interest is currently 6.01%, but they haven't reduced for the 1.5% BoE cut yet, and we can expect another percent base rate cut in December, and probably the same again in January to about 1%.

I imagine the rate on my B&B account will plummet similarily.

We plan to buy a new house in a year, and if I move to a 1yr bond then this money would be the last to mature ie. we would be waiting on it. I have a Nationwide Flexaccount, so I can xfer the B&B money online to it, open an eBond the second it's cleared and of course get it back pronto after 12 months. The NW eBond rate is only 4.6%, but the BoE rate could be 1% soon.


So (eventually!!!) the question is of course should I stick or twist?

Put another way am I right to expect that variable rates will fall such that it will earn a lot less over 1yr than 4.6%?

Thanks for getting this far :-)

Stompa

blackswan2 wrote: »

Some money is in a B&B eSavings account (issue 3) and the variable interest is currently 6.01%

I hate to be the bearer of bad news, but according to:

http://www.bradfordandbingley.co.uk/savings/product/index.asp

the rate on the eSavings account (issue 3) is currently 4.80%, and will drop to 3.20% tomorrow (16th Nov).

blackswan2

God almighty, nice of them to tell me.
Going to close it now, transfer to Nwide and open their 4.6% bond or find something better online.

Thanks!

LongTermLurker

Stompa wrote: »

the rate on the eSavings account (issue 3) is currently 4.80%, and will drop to 3.20% tomorrow (16th Nov).

At 6.01 I think OP meant Internet Savings Issue 3, not esavings?

That is dropping to 4.51% AER tomorrow

edit - expect all rates to drop reasonably equally, although I still expect ICICI to stay up at the top

Stompa

LongTermLurker wrote: »

At 6.01 I think OP meant Internet Savings Issue 3, not esavings?

Could be I guess. B&B don't seem to have a very good account naming convention, in that they refer to all their online accounts as eSavings accounts, yet they also use eSavings as a name for specific accounts.

blackswan2

LTL is right, but as Stompa says their use of the term eSavings is plain stoopid.
Account closed (CHAPS on Monday), now to see if there is a better quick home than the Nwide bond.
Cheers.

tuggy12

LongTermLurker wrote: »

At 6.01 I think OP meant Internet Savings Issue 3, not esavings?

That is dropping to 4.51% AER tomorrow

edit - expect all rates to drop reasonably equally, although I still expect ICICI to stay up at the top

ICICI have reduced their variable HiSAVE Savings Account rate to 5.5% from 14/11/08 and that takes into account the latest BOE 1.5% cut, so it's currently one of the best rates around.
The first £50k is fully covered by the FSCS

blackswan2

Any thoughts on what will happen in general to vriable savings rates, will they plummet like the base rate?

I still have variable rates with NatWest (eSavings), currently 4.44% plus 2.09% bonus and West Bromwich (Stratus) currently 6.56%.

blackswan2

just checked, West Bromwich went down to 5.85% on Nov 3rd, they must've forgotton to tell me !
NatWest down to 6%, looks like they forgot too.

tuggy12

blackswan2 wrote: »

just checked, West Bromwich went down to 5.85% on Nov 3rd, they must've forgotton to tell me !
NatWest down to 6%, looks like they forgot too.

Yes but those rates will be cut again after the last BOE 1.5% cut on Nov 6th

blackswan2

Co-op offering 5.25% for 1 yr - I shall give them a call tomorrow and close one of the variables - penalties with the West Brom one I think though. Nat West includes a 2% bonus, which MIGHT mean it doesn't fall too much.
(yeah dream on)