BoE's Kate Barker - Rates could stay low for some time

inspector_monkfish

Mind you, LIBORs are still trickling lower...

Old_Slaphead

inspector_monkfish wrote: »

can't be many of them !

One year FRBs paying 6-7% are starting to mature in next couple of months. No-one savvy enough should have had too much difficulty in securing 5% to December 2009 (ie Halifax Web Saver Reward Saver, available until Dec 2008 paying 5% for first 12 months -additions to account allowed).

Anyone locking in for 2-5 years (plenty of deals in mid 2008 at 6+%) should be able to ride out low savings interest environment. There were plenty of warnings last November re. downward movement on rates.

bendix

So I have a question for those who think interest rates will stay low for several years to come.

I've got a term deposit of around £150,000 maturing later this month, and I'm debating whether to stick it in a five year term deposit paying 6% per annum. Tax isnt an issue - its in my NZ bank overseas. I won't need the cash during that period.

Would you do it?

inspector_monkfish

bendix wrote: »

So I have a question for those who think interest rates will stay low for several years to come.

I've got a term deposit of around £150,000 maturing later this month, and I'm debating whether to stick it in a five year term deposit paying 6% per annum. Tax isnt an issue - its in my NZ bank overseas. I won't need the cash during that period.

Would you do it?

is it in NZD already?

NZD base rate is alot higher than UK, as you would probably know.

I'd take the 6pct if i were you.
Can't see you getting better than that over here in the next 5 years.

bendix

Yeap . it's over there at the moment, earning 4.25% for three months.

I have another wedge earning 8.55% until Jan 2010 - oh how I wish I had gone with the full five year term at 9% when I had the chance. Instead, I wimped out and fixed for 18 months.

Gotta love that 2% levy on interest payments for non-residents ;-)

inspector_monkfish

bendix wrote: »

Yeap . it's over there at the moment, earning 4.25% for three months.

I have another wedge earning 8.55% until Jan 2010 - oh how I wish I had gone with the full five year term at 9% when I had the chance. Instead, I wimped out and fixed for 18 months.

Gotta love that 2% levy on interest payments for non-residents ;-)

NZ Reserve Bank are reviewing the base rate tomorrow, so be careful with that one. Currently at 2.5%

You have done well to get a 3mth fixing at 4.25pct.
Current 3mth Kiwi depos are trading interbank around 3pct.

Really2

bendix wrote: »

I've got a term deposit of around £150,000 maturing later this month, and I'm debating whether to stick it in a five year term deposit paying 6% per annum. Tax isnt an issue - its in my NZ bank overseas. I won't need the cash during that period.

Would you do it?

I would as I can't see you getting that rate anyware else in 5 years.

Your problem is your belief of inflation so you should be investing in assets.

I don't believe high inflation or hyper inflation will gain a hold so go for the rate, i will be keeping my tracker:)

bendix

inspector_monkfish wrote: »

NZ Reserve Bank are reviewing the base rate tomorrow, so be careful with that one. Currently at 2.5%

You have done well to get a 3mth fixing at 4.25pct.
Current 3mth Kiwi depos are trading interbank around 3pct.

Bank of New Zealand (the largest retail bank) is still advertising 4.25% for three months on their website today.

Yes, I'm aware of the RBNZ decision overnight. It will likely drop, but the last two times it's dropped it hasnt affected longer term deposit rates.

We shall see .. .

bendix

Really2 wrote: »

I would as I can't see you getting that rate anyware else in 5 years.

Your problem is your belief of inflation so you should be investing in assets.

I don't believe high inflation or hyper inflation will gain a hold so go for the rate, i will be keeping my tracker:)

Oh, believe me, I am. But I'm planning on retiring in 4-5 years so am happy to keep signicant cash reserves in . umm . .cash so long as it generates a decent return.

The monthly drip feed and pension fund payments are all in assets.

A balanced portfolio ;-)

Really2

bendix wrote: »

Oh, believe me, I am. But I'm planning on retiring in 4-5 years so am happy to keep signicant cash reserves in . umm . .cash so long as it generates a decent return.

But surely if hyper inflation took hold that would be a disaster and your £150K would be nothing in five years time.

I see why you want a balanced portfolio but that hardly goes with what you say is going to happen.