MSE News - Savings tracker bonds launched for base rate gamblers

Mickygg

Lokolo wrote: »

It is a tracker. Just happens that the minimum rate is above the current base rate.

Mortgages are exactly the same, are they therefore not trackers because they stop at a certain point?

Nope it's not a plain tracker - A tracker savings or mortgage is just that - it tracks the base rate with no catches. Ones that stop at a certain point are called floor or collar trackers - there is a difference.

savetilibleed

Jonbvn wrote: »

The Coventry account looks good.

http://www.coventrybuildingsociety.co.uk/savings/productfeatures.aspx?ProdCode=GTB1

I think I will be moving over money from Investec High 5, whose rate now looks quite poor.

Wouldn't touch shabby abbey with a bargepole.

Or there's their 2 yr fixed rate bond at 3.70%. BOE rate would need to rise to 1.5% to make them equal now or very soon.

alanq

The 3.7% bond allows no access. The tracker allows access with 90 days loss of interest.

Milarky

Quick estimate: Base rate has to average at least 1.8% between now and 24 months time (if compared to best 2 year bond available). Some scenarios

Jul n/c
Aug n/c
Sep n/c
Oct +0.25 [n/c]
Mar +0.25 [n/c]
Jun +0.25 --> 3.55%
Sep +0.25 --> 3.8%
Feb +0.25 --> 4.05%
Sep +0.25 --> 4.3% [but 'matures' in Aug, so this has no effect]

Thus I'm seeing a base rate of 2% in 2 years under this scenario and something tells me even that is a bit 'sudden' the way the MPC is playing for time.

To even average 1.8% in the next 24 months base rate rising, at 0.25% each time, would have to get to about 3% by then. That's 10 rises - about one every two months [t'aint going to happen]

ninky_2

my mortgage is base rate plus 0.49 percent tracker. so this looks like a good deal compared to overpayments.

any other catches other than 90 day notice? i guess you have to pay tax on the interest.

Milarky

ninky wrote: »

my mortgage is base rate plus 0.49 percent tracker. so this looks like a good deal compared to overpayments.

any other catches other than 90 day notice? i guess you have to pay tax on the interest.

The obvious one to consider is whether your fixed rate deal term is as long as (or longer than) the term on this particular product? Also, possible 'overpayments' spread over over two years in the meantime can't be compared to making a (single) fixed term deposit at the outset.

KTF

Does anyone have the link to the Santander account on their site as I have had a look but cant find it.

Tony_Geo

I think its not an on line account. Only available at a Branch in person, Santander have been doing this recently. I blame their [EMAIL="!!!!"]!!!![/EMAIL] computer system.

KTF

I just wondered if it classed as an 'investment' as a doorway into the Zero current account.

Tony_Geo

I do not think so. Its just an account they advertise in their windows not on the website.