Just for fun - whats your average interest rate across savings?

droopsnoot

I did a spreadsheet a while ago that just lists each account and its balance, the AER and calculates the interest I expect to receive over the year. I have conditional formatting on the rate, which highlights in red anything below an arbitrary rate (which I've had to decrease to stop them all being red), and I have a date column which reminds me when to review the account because of an ending bonus rate or whatever. At the top, I have the total amount, and the total interest, and divide one into the other. Right now, it's showing a quite depressing 1.83%.

KGriff

droopsnoot wrote: »

I did a spreadsheet a while ago that just lists each account and its balance, the AER and calculates the interest I expect to receive over the year. I have conditional formatting on the rate, which highlights in red anything below an arbitrary rate (which I've had to decrease to stop them all being red), and I have a date column which reminds me when to review the account because of an ending bonus rate or whatever. At the top, I have the total amount, and the total interest, and divide one into the other. Right now, it's showing a quite depressing 1.83%.

Droopsnoot, the thing is here, you find your interest rate now at a miserly 1.83%. Yet had you have invested all your money in cash ISA's, year on year, you could have a minimum of £100,000 + now earning at least 2% or higher... If you have a partner, then you could easily double that figure, yet a lot of people seem to think that such ISA savings are dead.

Again, I'm excluding investing here, but sometimes savers need to consider the longer term outlook too.

I'm not being in anyway critical by the way, as I'm sure there are many reasons many people, now find themselves picking up less than 2% returns across their accounts, not least for the reasons I mentioned in my earlier post.

droopsnoot

Just to be clear, did you mean S&S ISAs when you said "invest", or did you mean cash ISAs? I'm not being picky, just wanted to clarify. I didn't make a lot of use of the ISA allowance at the beginning, however I have tried to do so in more recent years, even to the extent of sticking some in a Halifax cash ISA in the closing days of last (tax) year. It perhaps wasn't the best option, but the money was already in the Halifax in a savings account that had dropped to 0.2%, so it was a simple decision to open a 1.05% ISA and stick some across to it. It was a very simple process, too - no messing around waiting for an account number in the post (as with my Nationwide Loyalty Saver), it opened in seconds in the online banking. Strange that earlier in the year I'd had so much hassle trying to get money out of the Halifax that I'd vowed to take it all out and never trouble them again.

Interestingly in thinking about this, I do include the total amount in my S&S ISAs (and some in non-ISAs, as well) in the grand total, but of course I have to show that as zero interest because it doesn't work that way - I just record the current value on a monthly basis to give an overall sum. I've modified it now to exclude the non-cash accounts from the total and have a much nicer though still pathetic 2.26%. I must remind myself that it doesn't equate to any more actual money, though.


ETA - Intrigued that you mention rates above 2%, I will have to read up more on this as it seems I'm out of touch. Or perhaps it's just that I don't want to tie up the money on fixed rates.

KGriff

droopsnoot wrote: »

Just to be clear, did you mean S&S ISAs when you said "invest", or did you mean cash ISAs? I'm not being picky, just wanted to clarify. I didn't make a lot of use of the ISA allowance at the beginning, however I have tried to do so in more recent years, even to the extent of sticking some in a Halifax cash ISA in the closing days of last (tax) year. It perhaps wasn't the best option, but the money was already in the Halifax in a savings account that had dropped to 0.2%, so it was a simple decision to open a 1.05% ISA and stick some across to it. It was a very simple process, too - no messing around waiting for an account number in the post (as with my Nationwide Loyalty Saver), it opened in seconds in the online banking. Strange that earlier in the year I'd had so much hassle trying to get money out of the Halifax that I'd vowed to take it all out and never trouble them again.

Interestingly in thinking about this, I do include the total amount in my S&S ISAs (and some in non-ISAs, as well) in the grand total, but of course I have to show that as zero interest because it doesn't work that way - I just record the current value on a monthly basis to give an overall sum. I've modified it now to exclude the non-cash accounts from the total and have a much nicer though still pathetic 2.26%. I must remind myself that it doesn't equate to any more actual money, though.


ETA - Intrigued that you mention rates above 2%, I will have to read up more on this as it seems I'm out of touch. Or perhaps it's just that I don't want to tie up the money on fixed rates.

Ok I accept 'investing' is a word associated to shares etc. and 'saving' is associated moreso to cash accounts, so I probably should have chosen the word 'saving' in my post. That would have been more appropriate.

I read your post and it's so true that sometimes it can be more convenient to stick with 'the same provider' on occasions, particularly if we are juggling other things in the air, that life throws at us from time to time. Sometimes the providers don't make the process of changing accounts or providers as easy as it should be, but it has got a little bit better in the last few years.

Yes the 2%+ would have meant a fix for two years, for example the Leeds BS ISA (which closed after 4 days I think, as it was over-subscribed) that pays 2.1% and was a 'reasonable' fix and perhaps good for those that had already filled their high interest paying current accounts, TSB, Santander 123 etc.

I assumed you had filled those or you would be getting the 2.4% minimum interest (after tax) from the lower paying Santander 123 account.

But it is true of many of us, sometimes it is easier to go with a slightly less rate, either out of convenience, or a decision not to fix (perhaps in hope of a future higher rate).

Clearly as a 'saving' and 'investing' enthusiast, it is a sad thing that people are getting less than 2% I think.

My brother is a 'stick it in a bank current account... and leave it there' type of person and the banks are walking all over those type of people. Mind you it's his choice and he finds it too much of a problem to change anything... including his utiility providers at a few clicks of a mouse.

The banks rarely send him or others decent offers to move his money to a higher earning interest area. These things should almost be automatic for the people on lower income.

Likewise those with substantial amounts of money don't have many opportunities to get ALL their savings earning a high 'risk-free' interest rate. Instead they are actively encourage to 'invest' rather than 'save' and with that comes higher risk.

In truth it's still the banks and financial provders who are the biggest winners in this world, and the profits are massive.

Only a few (like the savers and investors on this forum), who aggressively chase the rates, are keeping up with the tide, but at such low interest rates, I am beginning to feel like we are all sinking slowly.

droopsnoot

I keep looking at the various current account options and have to admit I've done nothing with them so far. The continual round of payments in and out concerns me, for example if/when one of the DDs required for the merry-go-round goes out late or early because of a weekend. I think before I set up the various accounts, I may well edit the spreadsheet to see if I can figure out how much actual difference it would make - 5% is nice, but if it's only on (say) £2000, it equates to a relatively small amount of actual cash compared to the potential hassle involved.


My new Halifax ISA was entirely my fault - usually I put into a cash ISA at the start of the new year, this time I was hanging on waiting for some better rates but ended up leaving it almost too long. Despite the rates I couldn't bear the thought of missing a years allocation, so I just took the quick option, usually the worst thing to do other than nothing at all.


A mate of mine is similar to your brother by the sound of it - any time talk in the pub turns to ISAs or any kind of money matters, he'll say that he just keeps his in the building society because it's not going to lose anything there. Inflation doesn't enter his thoughts, it's all about not losing money in a stock market crash, but if he's happy with it, who am I to stick my oar in?

Eco_Miser

droopsnoot wrote: »

The continual round of payments in and out concerns me, for example if/when one of the DDs required for the merry-go-round goes out late or early because of a weekend.

This is normally only a problem if you've got a Halifax Reward with a low balance in the loop. All the banks except Tesco seem to delay weekend/BH SOs the same, so no problem, and if one does go early, there would normally be sufficient in the account to cover it.

However. personally I use faster payments, since I'm dealing with irregular dividend/interest receipts at the same time.

KGriff

droopsnoot wrote: »

I keep looking at the various current account options and have to admit I've done nothing with them so far. The continual round of payments in and out concerns me, for example if/when one of the DDs required for the merry-go-round goes out late or early because of a weekend. I think before I set up the various accounts, I may well edit the spreadsheet to see if I can figure out how much actual difference it would make - 5% is nice, but if it's only on (say) £2000, it equates to a relatively small amount of actual cash compared to the potential hassle involved.


My new Halifax ISA was entirely my fault - usually I put into a cash ISA at the start of the new year, this time I was hanging on waiting for some better rates but ended up leaving it almost too long. Despite the rates I couldn't bear the thought of missing a years allocation, so I just took the quick option, usually the worst thing to do other than nothing at all.


A mate of mine is similar to your brother by the sound of it - any time talk in the pub turns to ISAs or any kind of money matters, he'll say that he just keeps his in the building society because it's not going to lose anything there. Inflation doesn't enter his thoughts, it's all about not losing money in a stock market crash, but if he's happy with it, who am I to stick my oar in?

Droopsnoop

I wonder if my brother uses the same pub? .. ha ha

My main account from when I was 17yrs old was Barclays .. I am now 56yrs, so really I have that account probably out of sentimentality. My works pension and part-time salary are paid to that account.

My wife is also with Barclays and she has her wages go into that account. Again she has the account out of sentimentality.

We each opened a Santander 123 current account, which we were very lucky enough to have the money to top up both, to the £20,000 limit.. Which we did within a few days of opening.

We then set up direct debits on the account:

The wife has the council tax, water rates, electric and mobile phone bills.

I take care of the Internet, tv, home phone, and gas, tv licence. (there are others but they are not relevant)

Most bills go out between the 1st and 9th of the month... So on the 28th of each month a standing order transfer £500 from our Barclays accounts to our Santander accounts .. This is the minimum required funding on the 123 account... Sometime after the 9th, any money left over the £20,000 limit (all bills paid) goes off to a high interest savings account (I try to do this manually on the 10th of each month). We have done our ISA's for this year.

Sorry if that sounds a fair amount of money, I'm not bragging, please remember I am semi-retired myself and my wife is retiring soon... So we have done the majority of our investing and saving over the last 25+ years and we are now perhaps over the savings hill and just staying 'afloat' in the main and getting the best rates we can see on offer without too much risk... But we do have stocks and share ISA's too, but not as many as we used to hold. Most is now in our cash ISA'S.

We also use a joint Santander 123 cash back card for petrol and shopping and that has a direct debit from my account to pay that off in full on the 9th of each month and we get cashback on 'most' of our spending on that card.. It's also interest free on purchases for 23 months.

The wife spends too much on shopping and blames me for putting stuff in her trolley, but that's another story. :-)

You are also allowed to open a third joint 123 santander current account too, in fact the Santander staff positively encouraged us to open a joint account, so it is not frowned upon by the bank staff in anyway.

Managed carefully, cashback accounts like these, can be an advantage to some savers and they are worth a closer look, where a persons circumstances allow the profits, through interest and cash back, to be maximised. Often better than most cash ISA's and better than most immediate access savings accounts, but like any financial product, it's not for everyone.

I totally agree with you also that the TSB £2,000 at 5% is perhaps not for me either, but it is a good option for some others.

Anyhow I hope our experience helps your ongoing research to find the best rates.

KGriff

Eco_Miser wrote: »

This is normally only a problem if you've got a Halifax Reward with a low balance in the loop. All the banks except Tesco seem to delay weekend/BH SOs the same, so no problem, and if one does go early, there would normally be sufficient in the account to cover it.

However. personally I use faster payments, since I'm dealing with irregular dividend/interest receipts at the same time.

Droopsnoop,

Eco Miser above is absolutely correct, I have not had a problem with the standing orders and both Barclays and Santander use the faster payment system, so it's the same day .. (touch wood) .. No issues for the wife or myself so far.

Like Eco Miser says the money is in the account to pay the bills anyway, so nothing to worry about.

KGriff

I reckon just on my savings accounts alone and excluding stocks and shares, I am getting 2.094% .. I have just taken my Santander accounts at 2.4% net and not included cash back etc.

So perhaps I could round things up to approx 2.1% ... and I really do try to chase the rates.

I wonder if it will get any worse than this?

veryintrigued

Looking at another thread there seems to be some interest on this type of topic again.

Hence I'll bump up.

Just to re-cap this figure is across 20-30 accounts (Regular saver, instant, ISA, current accounts, fixed rate etc) on £50k+ (I'll avoid giving exact figure).

The only accounts which has recently ended is a Penrith 4% R.S.

A re-opened 5% NW Flexdirect and their new R.S have more than balanced this though.

Accounts nearing their 'maturity' on the horizon include the F.D and HSBC 6% R.S and also a Notts BS R.S.

Am on 3.63% net on £50k+ (once again I'll avoid giving exact figure)