Tesco internet saver rate dropped from 3.25% to 3% from 16 April

bagsacash

3% is garbage, it might be better than some of the others, but rates in general are diabolical.

This is a wake up call to me, why am I even bothering chasing these rubbish rates of return - I must be mad.

Appart from the ISA I hold my money is going into shares, I can make in one day what banks are paying annually

sheslookinhot

bagsacash wrote: »

3% is garbage, it might be better than some of the others, but rates in general are diabolical.

This is a wake up call to me, why am I even bothering chasing these rubbish rates of return - I must be mad.

Appart from the ISA I hold my money is going into shares, I can make in one day what banks are paying annually

Yes, why are you then ?

masonic

bagsacash wrote: »

3% is garbage, it might be better than some of the others, but rates in general are diabolical.

This is a wake up call to me, why am I even bothering chasing these rubbish rates of return - I must be mad.

Appart from the ISA I hold my money is going into shares, I can make in one day what banks are paying annually

Let's look at this in real terms:-

RPI = 0.0% (Feb 2009), Tesco Rate = 3.0%.
RPI = 4.1% (Feb 2008), Rate required to equal Tesco rate in real terms = 7.1%
RPI = 4.6% (Feb 2007), Rate required to equal Tesco rate in real terms = 7.6%

I don't know which instant access savings accounts were paying 7+% interest in the recent past, but I certainly couldn't find a rate that good! Personally, my cash savings have never performed better than they do right now.

bagsacash

RPI isn't that the rate that included house prices, and house prices have falled. But we all know prices in the shops have increased substacially

Whats is the current CPI rate today?

bagsacash

CPI = 3.2% up from 3.0%

Tesco savings rate = 3.0% emmmm...:rolleyes:

oldfella

I don't know which instant access savings accounts were paying 7+% interest in the recent past, but I certainly couldn't find a rate that good! Personally, my cash savings have never performed better than they do right now.

---

rpi isnt the whole story - if you pay for a range of regular costs out of interest income, the rates have collapsed - if your income isnt there how do you pay ?

SavingSteve

bagsacash wrote: »

Appart from the ISA I hold my money is going into shares, I can make in one day what banks are paying annually

Good luck with that, do let us know what rate of return you get with this new strategy over the next 12 months

masonic

bagsacash wrote: »

RPI isn't that the rate that included house prices, and house prices have falled. But we all know prices in the shops have increased substacially

Whats is the current CPI rate today?

RPI doesn't include house prices, but it does include mortgage interest.

IMHO, CPI is a useless measure of inflation. If you want a figure that excludes mortgage interest, then there is the RPIX, which is currently at 2.5%, down from highs of around 5.5%.

That suggests you'd need to shave up to 3.5% off historic rates in order to compare like for like. So that 3% from Tesco would still be equivalent to 5.5-6.5% offered in the recent past.

masonic

oldfella wrote: »

rpi isnt the whole story - if you pay for a range of regular costs out of interest income, the rates have collapsed - if your income isnt there how do you pay ?

You draw down on your capital. In the past inflation did the work for you by eroding its value. In times like this, you need to withdraw those few percent inflation is no longer claiming and use it to top up your income.

There is no difference in real terms between, say, being paid 5% interest where inflation is 4% and being paid 1% interest and topping that up with 4% of your capital where inflation is 0%. The only issue is that you have to keep a portion of your savings in an account that permits such withdrawals.

sabretoothtigger

bagsacash wrote: »

3% is garbage, it might be better than some of the others, but rates in general are diabolical.

This is a wake up call to me, why am I even bothering chasing these rubbish rates of return - I must be mad.

Appart from the ISA I hold my money is going into shares, I can make in one day what banks are paying annually

That sums it up. They want you to invest, speculate and spend that money not save it so you are doing what the government wants imo

On the other hand if they paid a proper rate of interest banks would gain more deposits and be more secure in their funding maybe. Instead everything is done backwards

Governments should encourage stability and instead they do the opposite to 'stimulate' the economy