Chasing interest rates down, what are people doing?

bellagirl69

Hello, looking for advice and opinions.

Myself and my husband have held regular savings accounts for numerous years but am now finding it difficult to find homes for maturing funds?

A year or so ago we wouldn't touch anything less than 4%, we now have everything available to us at 3%. I am now looking at 2.75%/2.8%!!

Previously we would put chunks into fixed rates but they are diabolical. I will not lock money up for 5 years at a paltry 3% in case there is upward movement again.

What are people doing, any tips?

IronWolf

I haven't found any clever ways tbh. I just keep as little cash as I need in savings accounts, and the rest is invested in the stock market.

Regular savings accounts still offer half decent interest, my FD one is 6% but obviously there's a limit to how much you can put in.

FLAPJACK

Seems the only option at the moment is to put 5k in three Lloyds VANTAGE accounts......the same with BoS.

I see the new TSB are calling their interest bearing accounts ENHANCE...the same principle.

It's only 3% but at least over a number of accounts you can salt away a reasonable sum, and the money is instantly available should rates begin to rise in the future.

All the above accounts have a max of 5k and you have to cascade 1k through them once a month..just transfer 1k from one to another...a pain but doesn't take long.

bellagirl69

IronWolf wrote: »

I haven't found any clever ways tbh. I just keep as little cash as I need in savings accounts, and the rest is invested in the stock market.

Regular savings accounts still offer half decent interest, my FD one is 6% but obviously there's a limit to how much you can put in.

Trouble is we are retired and will not risk the vagaries of the stock market as cannot take the long term view. We are only prepared to hold in savings accounts.

tarnish

I have similar problem. Recently switched bank to Santander 1-2-3 account to give 3% on credit to £20,000. and various cash-back helps. I was reluctant to do that after reading the apparent lack of customer satisfaction but I have been very impressed with them.

Ifts

bellagirl69 wrote: »

Previously we would put chunks into fixed rates but they are diabolical. I will not lock money up for 5 years at a paltry 3% in case there is upward movement again.

You don't have to lock your money away for 5 years to get 3% on £20k, you can get 3% with a Santander 123 current account on balances up to £20K (you are allowed to have 2 accounts per person, so can get 3% on up to £40k) and its easy access. And the possibility of cashback on your Direct Debits going out of the account too.

http://www.santander-products.co.uk/banking/media/123.html

You and your husband could have 2 accounts in each name.


Edit: sorry just seen the - 'We have banked with Lloyds for over 30 years and will not change' on your other thread.
I was like that having been a customer of HSBC for many years, I kept my main banking at HSBC and opened a couple of Santander 123 accounts too, it was easy to do.

kidmugsy

It's possible to open a Stocks and Shares ISA and buy Index-Linked Gilts within it. The trouble at the moment is that they yield almost nothing above the RPI inflation rate (which is around 3.3.%p.a. currently), and part of the yield you get is in capital growth rather than income. I can see that it might sound complicated to someone used to the simplicity of deposit accounts. But if there were a clever dodge that yielded high interest rates, we'd all have piled into it and so the interest rate on offer would have declined.

Linton

bellagirl69 wrote: »

Trouble is we are retired and will not risk the vagaries of the stock market as cannot take the long term view. We are only prepared to hold in savings accounts.

I dont think being retired means you cannot afford to take the long view, at least for part of your money. It all depends how old you are:

At 65 you could reasonably hope for another 20 years of life, so having 25% of your wealth invested that you wont want to access for another 15 years seems reasonable. 15 years is pretty long term. Taking inflation into account, keeping the money in savings accounts could be fairly high risk.

Of course at 90 the sums would be rather different.

bellagirl69

Ifts wrote: »

You don't have to lock your money away for 5 years to get 3% on £20k, you can get 3% with a Santander 123 current account on balances up to £20K (you are allowed to have 2 accounts per person, so can get 3% on up to £40k) and its easy access. And the possibility of cashback on your Direct Debits going out of the account too.



You and your husband could have 2 accounts in each name.


Edit: sorry just seen the - 'We have banked with Lloyds for over 30 years and will not change' on your other thread.
I was like that having been a customer of HSBC for many years, I kept my main banking at HSBC and opened a couple of Santander 123 accounts too, it was easy to do.

Presumably I can open a Santander 123 without switching from LLoyds as long as I set up direct debits and fund the account.
Can I really open two of these?

badger09

bellagirl69 wrote: »

Presumably I can open a Santander 123 without switching from LLoyds as long as I set up direct debits and fund the account.
Can I really open two of these?

Yes you can

I opened my 1st Santander 123 account in March, and my 2nd last week. Still got my trusty 40+ year old Co-op account as well as multiple others

FLAPJACK

I take it with already being with Lloyds you have your Vantage accounts up and running.