MSE news: Boost for savers as trio of top accounts launch (Barnsley, YBS, Halifax)

Andystriker

Anyone know if I open a 3 year Bond with Barnsley online do I have any time to pay funds.

I understand they will accept the first payment by chq. So if I fill the form in online, how long will they wait for the chq?

Anyone know?

bagsacash

Locking ones money up for even 2 years in a fixed rate savings account in the current cliamate sounds like a very bad idea.

The economy seems to be gaining momentum, thus, inflation will rise along with interest rates.

Steve_xx

bagsacash wrote: »

Locking ones money up for even 2 years in a fixed rate savings account in the current cliamate sounds like a very bad idea.

The economy seems to be gaining momentum, thus, inflation will rise along with interest rates.

Yes you're right, but how long will it take for inflation to rise? Will it be allowed to rise before the next general election which is one year away? Taking on a two year deal at 5% would only leave 1 year after the election and during that one year inflation would have to rise pretty sharply to get to the 5% mark I guess, but it could happen.

Also, to be taken into consideration is the potential that the banks are offering good rates at the minute due to the fact that they need to bolster their balance sheets, this is regardless of base rate being at 0.5%. As they get their balance sheets to the required levels it could be that their saver rates will settle or narrow and the margin between saver and mortgage rates will continue to widen as the banks take more profit that way.

I'd say on balance that at the moment it is probably wise for savers to lock in at around 5%+ for two to three years as the current boost for savers might be shortlived.

Reaper

It's nice to see companies starting to compete on interest rates again, however I'm not tempted by these deals. Anybody who is happy with 5% ought to have already got the Newcastle account. The 3 year bond is poor by comparison involving a longer lock in with no escape. In my opinion the 4 and 5 year deals are too long to tie up your money in an unstable market.

A hopeful sign of what's to come though.

Thanks to Steve for posting, and also to MSE for the new thread policy and well researched news story.

bagsacash

I don't know for sure when inflation will rise, but its been said for some time that the economy is expected to grow next year, thats when inflation is likely to start creeping up.

What a good time for banks to get people to start locking their money away in 5 year bonds, knowing that interest rates could be on the rise some time next year.

The mess this government has made of the economy with some predicting national debt expected to reach entire GDP of the country in just a few years, and the BoE with its quantative easing are both the fuel inflation needs to take off. Oil prices have also started to creep back up adding more fuel to the fires of inflation.

Also keep in mind that inflation is now below target and measures will be put in place to increase inflation over the coming months, unless the government want deflation.

Steve_xx

Yes I agree with much of what you say. The thing is we are in relatively unchartered waters at the moment and I think people in these circumstances will look for an element of certainty, especially those who are dependent on savings interest to boost or even supply their income.

I think at around 5% there is not much harm done in locking some savings in at these rates, and of course with the recent Newcastle BS bonds you're not actually locked-in beyond 90 days. I think Newcastle possibly made an error there.

Among the things that cause inflation are wage increases, ie demands by workforces on their employers for higher wages due to price rises in the shops. This time around it is remarkable that employees are actually taking pay cuts in some organisations. This will allow the employers to hold prices at the factory gates, thus stemming inflation to a degree. On the other hand it is difficult to see how inflation cannot take off due to the fact that sterling is weak and therefore we have to pay more for goods that we import and this is bound to translate into higher prices in the shops. These price rises will become more apparent as oil prices start to rise thus making it more expensive to transport the goods to the UK.

To me the outlook is gloomy, in contrast to the outlook being purported by the UK governement who are unbearably indebted to a horrifying degree and who are catering not for the benefit of UK plc, but for their own desire to stay in office and wreak further havoc in an already shattered economy.

straw_hat_2

Its the end of 3yr when money is put into 2yr roll over acc that puzzles me is the money locked in as part of the deal? or can you close the account with no penalty,s

Steve_xx

straw_hat wrote: »

Its the end of 3yr when money is put into 2yr roll over acc that puzzles me is the money locked in as part of the deal? or can you close the account with no penalty,s

Barnsley BS:

On maturity your balance will be automatically transferred to an online instant access internet account. You may have the option to transfer the balance into another fixed rate product without the need to re-apply.

harz99

Reaper wrote: »

It's nice to see companies starting to compete on interest rates again, however I'm not tempted by these deals. Anybody who is happy with 5% ought to have already got the Newcastle account. The 3 year bond is poor by comparison involving a longer lock in with no escape. In my opinion the 4 and 5 year deals are too long to tie up your money in an unstable market.

A hopeful sign of what's to come though.

Thanks to Steve for posting, and also to MSE for the new thread policy and well researched news story.

The Barnsley offer has one important (to some of us) thing that the Newcastle also did -it offers a paid away monthly income option.

And yes, you may well be right about the 4/5 year terms, but as long as the amount stashed away is not all your nest egg in one basket, swings and roundabouts should apply IMHO.

freakinthefield

Hi, all,

Bit of a novice to all this stuff, but could use some advice from all you Money Saving Experts.

I want to set up a savings account in my own name (to avoid complications with tax liability) but controlled by my mother (so I can't try to spend the dosh!) and don't know where would be the best place for this. At the moment, I have £51 put by for this account, with more to come on Tuesday, and then in dribs and drabs ongoing.

Any advice would be most gratefully received. The main thing is that I shouldn't have access to withdraw funds, but can pay in online whenever I want to from my main current account. Ideally, I would like all bank correspondence regarding this new savings account to go to my mother, rather than to me, but don't know if this is allowed - would it smack of money-laundering??!??

I anticipate that the money will stay in this account and gradually build up over at least the next 5 years, but I'm not sure whether or not it makes sense to put it in something that is fixed for 5 years. After all, the rates might improve dramatically before the end of 5 years - we must stay positive!

So I leave it with you, and many thanks in advance for your consideration of this.

Cheers,

Freak
;)