Poor savings interest

JAMES_TAYLOR

Why are we all putting up with really poor interest rates on our savings, when those that have our money for pittance are making large amounts of money loaning it. If we all started putting our money somewhere else, the banks and loan companies would be on their knees for our money at much better rates. This year it seems everybody is following the leader in reducing savings rates. When is all this stupid bonus for one year going to end? There is no loyalty anymore, and it must be costing these companies money closing accounts when people have moved on.

Then I look at ISA's, what a deal that is, we are allowed to only put stupidly low amounts in every year, and because it takes so long to build, we are all afraid to take it out and spend it. Again the lenders are laughing all the way.

I think it's time for change, we all just watch it happen and think we can't do anything about it.

MoneySaverLog

No they won't need our savings because us tax payers are loaning the banks cheap money through our taxes in addition to all the money that is printed devaluing the pound and making it worth less and less as inflation eats into the capital.

Putting up with it cause what else is there?

opinions4u

JAMES_TAYLOR wrote: »

Why are we all putting up with really poor interest rates on our savings, when those that have our money for pittance are making large amounts of money loaning it.

Although net interest margins, the difference between raise and lend, have been narrowing for years for most banks and building societies.

If we all started putting our money somewhere else, the banks and loan companies would be on their knees for our money at much better rates.

And then, when we all come running back with our money, they will cut rates again. It's all about supply, demand and state interference.

This year it seems everybody is following the leader in reducing savings rates. When is all this stupid bonus for one year going to end? There is no loyalty anymore, and it must be costing these companies money closing accounts when people have moved on

Lower rates will probably give rise to fewer bonus accounts. But if you stopped ranting and started thinking you'd realise that the bonus rate is crucial to the savvy saver achieving a decent return.

Savings rates have traditionally been best buy when they've matched BofE base rate. For years savers have been getting better than that. Like it or not, in a normal economy savings rates would not be 1% above BofE.

As for the cost of opening and closing accounts, minor in the great scheme of things.

Then I look at ISA's, what a deal that is, we are allowed to only put stupidly low amounts in every year, and because it takes so long to build, we are all afraid to take it out and spend it. Again the lenders are laughing all the way.

Why should the state give larger amounts of relief to savers who won't help them spend their way out of economic disaster?

I think it's time for change, we all just watch it happen and think we can't do anything about it.

Shares. Bonds. OEICs. Overseas accounts with higher rates. Property. There's a few options to choose from. The choice is yours.

2010

Poor Savings Interest.

Traditionally the BoE controlled inflation by changing interest rates.
They gave this up about four years ago when they realised they had to get people to spend and try to get the economy moving.
Hence the .5% rate.
When this didn`t have much effect they decided to print money, billions of £s, and give it to the very people who wrecked the economy, the banks.
They in turn sit on the money and don`t lend.
Then to make matters even worse, the government offers the banks really cheap borrowing with the FLS.

Now to add insult to injury the government has now come out with another crackpot idea of offering cheap mortgages using tax payers money to get the housing market moving.
Errrrrrrr

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aren`t the banks supposed to do that?

Basically to get/keep the economy moving people have to spend, spend, spend.
For that to happen, mortgages have to be cheap and saving rates low.

marlot

2010 wrote: »

...
They in turn sit on the money and don`t lend.
...

TO be fair, that's what the other arm of Government are telling them to do (via the banking regulation) - they've been told to strengthen their balance sheets.

But I agree with the analysis.

2010

marlot wrote: »

they've been told to strengthen their balance sheets.

But I agree with the analysis.

If they`ve been told to strengthen their balance sheets, where are they getting the money from to do it.
Surely sooner or later they have to turn to savers to get it.

opinions4u

2010 wrote: »

If they`ve been told to strengthen their balance sheets, where are they getting the money from to do it.
Surely sooner or later they have to turn to savers to get it.

The best way to strengthen a balance sheet (tier one capital) is to make profit and not pay dividends. The shareholders begin to rumble if you do this a lot.

The most common way is to sell parts of your business.

Such as LBG flogging off its Spanish retail business and its share in Sainsburys Bank. An easy £0.5bn.

Customer deposits form part of a balance sheet but are not the bit that is classed as capital.

You-kip

All ISA's or Bank and Building Society interest rates are insulting to investors. Go and have a laugh or some fun and invest in shares - not too much in any one company and a good spread of companies and I'm sure you'll get better returns.