Why are savings rates on the floor?

morrisoscar

I have just had a 1 year bond with Cheshire Building Society reach maturity, the new rate on offer for a 1 or 2 year bond was very low, I’ve had a look and all rates seem to be around the same. Could somebody tell me what happened that rates suddenly dropped.

CLAPTON

well the government is flooding the market with cheap money so the banks don't really need your money.

morrisoscar

CLAPTON wrote: »

well the government is flooding the market with cheap money so the banks don't really need your money.

Thanks !


Could you explain?

CLAPTON

It's been very widely reported in the newspapers a couple of months ago.

the government (BoE) is 'lending' the banks a lot of money at very low interest rates so they can increase mortgage lending and lending to SME
so the banks are awash with cash at very cheap rates.

CLAPTON

PS

if you want to know more look up

BoE funding for lending

Paul_N_4

With the help of tax payer's money, the government has decided to direct your savings interest into propping up asset prices. Our leaders have portfolios to protect don't you know.

Ifts

The great rate plunge: Top deals for savers continue to disappear at an alarming speed

Read more: http://www.thisismoney.co.uk/money/saving/article-2236216/Top-rates-savers-continue-disappear-alarming-speed.html#ixzz2DM2qvrKQ


Save our Savers: As banks slash their interest rates, Isa savers plead to be allowed to hold more in tax-free cash

Read more: http://www.thisismoney.co.uk/money/saving/article-2237895/The-Autumn-Statement-As-cash-lending-slashes-rates-Isa-savers-plead-allowed-hold-cash.html#ixzz2DM2NELUi

nilrem_2

morrisoscar wrote: »

I have just had a 1 year bond with Cheshire Building Society reach maturity, the new rate on offer for a 1 or 2 year bond was very low, I’ve had a look and all rates seem to be around the same. Could somebody tell me what happened that rates suddenly dropped.

I am in the same situation as you but with Nationwide, they have offered 2.20% (after tax deducted @20%) and that is for 3 years, I can do better than that with my instant access account with either Virgin or Natwest esave.

It's hopeless for savers ATM. As other have suggested the BOE have been throwing cash at them and they don't want our money.

CLAPTON

indeed

better to be a debtor than a saver.

nilrem_2

CLAPTON wrote: »

indeed

better to be a debtor than a saver.

Yes it's funny how things change, 6 years ago it was the other way around!

MoneySaverLog

So HMG are lending the banks cheap money through the taxes I pay so the banks can pay me a carp rate. Just not good enough.