Low interest rates

hebron

When banks lend us money they expect a fair return for their money.
When we lend banks our money we expect a fair return for our money.
With ISAs paying 1.5% and other account paying .5% I don't call this a fair return do you.

CLAPTON

I'm not realy sure what 'fair' means in this context.
Is the fair level related to the rate of inflation, rate of wage increases or what?

Normally it would be determined by supply and demand but things are strange at the moment with too much government illogical tinkering.

However, you can get over 3% if you look around.

Aegis

hebron wrote: »

When banks lend us money they expect a fair return for their money.
When we lend banks our money we expect a fair return for our money.
With ISAs paying 1.5% and other account paying .5% I don't call this a fair return do you.

Some mortgages are paying 1.5% or less at the moment for existing trackers. Other new mortgages will be paying as low as 2.99% (typically between 3 and 4% for new variable rates at the moment). Given that we can still get savings accounts between 3 and 4%, it doesn't seem that there's all that much to complain about. You just need to switch savings account provider if savings rates are all you're looking for.

withnell

hebron wrote: »

When we lend banks our money we expect a fair return for our money.

Well if you're not happy with the return your bank provides you can withdraw your cash!

Just remember that holding money under the matress offers very little protection against theft and a glorious rate of 0% gross/AER/net, however you like to look at it

gozomark

if interest rates were 10%, but inflation 20%, would you be happier ?

I'd much rather have interest rates of 4% and inflation of 1% over the next 2 years

dougs

Aegis wrote: »

Given that we can still get savings accounts between 3 and 4%

yes, for now.....

it's not going to be that way for much longer.

Broadback

Being a pensioner with some savings I can weather this storm, even with low interest rates. Unless inflation takes off, which I am terribly afraid it will. The government are playing a very inflationary game, most foreign analyst believe is heading for serious trouble. I just hope the analysts have it wrong, which they often do!

exil

If we get high inflation we will also have high interest rates.

Which means it's probably not a good idea to lock yourself in to a fixed rate for more than a year or two.