Shocked at annual interest on savings
Options
Comments
-
Birdynumnum wrote: »I said given the difference in interest rates, some 1500%empore caveat applies0
-
Equities may well outperform savings but like quite a few people they are not for me. IMHO if you have decent savings and pay tax ISA's are not that bad.
When you can get better rates than an ISA on savings up to around £30-50k there are very few people who would benefit from cash ISAs.
As Archibald mentioned the average savings balance in the UK is under £2000 and the average in a cash ISA is £7k.
When you can get 5% outside an ISA then I'd rather pay tax and still get a better return. If you have large cash balances that you are keeping indefinitely then it is certainly worth looking at S&S ISA options as there are funds available for most risk levels. Most people don't seem to understand S&S ISAs and the risk levels that they entail - it isn't a case of gambling your money and losing 100% if you choose funds.Remember the saying: if it looks too good to be true it almost certainly is.0 -
I assume you've read all the threads on here about ISAs vs current accounts?
I've read some of them, I wouldn't like to suggest I've read all of them by any stretch - like the "what shall I do with [insert random amount here]" threads that pop up every day, there seems to be a proliferation and it's impossible to go through all of them in case there's any decent new information. But I am basically aware of the general point.Unless you've already filled all the high interest current accounts there seems very little point in a cash ISA.
To be honest I find it difficult to motivate myself in view of the absolute amount returned - I know the headline interest rates are much better than elsewhere, but it translates to relatively small amounts of actual cash at the end of the year. I also have trouble with the direct debit requirements on many of these accounts, though I have recently read about the possibility of qualifying via DDs with Tesco. I will have another look around though, as I am regularly disappointed at the lack of returns, and perhaps I shouldn't turn my nose up at a few hundred pounds interest here or there. I worry about not keeping on top of things, getting the DDs out of sequence and ruining the lot for a year.
As nilrem said, for me the main point of building up the ISA pot was to get the money into something that is tax free ready for when/if the interest rates increase, without wanting to open up a row about whether that might happen in the foreseeable future. It somehow seems 'right' that I should ferret as much as possible away, not least because I didn't take advantage of the opportunity for the first few years of the scheme.0 -
I find it difficult to comprehend how even the non-financially savvy can struggle with this.
My savings provider tells me the interest rate when I open the account. They advise me clearly what element of that interest rate is a bonus rate and what element isn't. They tell me that my interest rate can vary. This information is there at the time of opening an account. I am not aware of ANY bank or building society that hides this.
My savings provider publishes the rate on their web site. Just about all do.
They also report it via my online banking. No click needed once I reach my account page. Some do, some don't.
They have interest rate leaflets in their branches. Unless they don't have branches.
They write to me two months before any bonus drops off (some leave this until 14 days before, but all write for a material rate reduction).
They send me an annual statement with interest rates on. All do.
They provide me with an easy online option to add a bonus back to the account. I can also do this in a branch or by phone. Some don't.
My laptop, phone and tablet all offer a reminder facility that allows me to diarise future events. The local pound shop sells diaries. For £1.
Since the beginning of time interest rates on savings accounts have been able to vary. Never have consumers been given more information about this than they are now.
Yet some still blame the banks.0 -
PeacefulWaters wrote: »I find it difficult to comprehend how even the non-financially savvy can struggle with this.
My savings provider tells me the interest rate when I open the account. They advise me clearly what element of that interest rate is a bonus rate and what element isn't. They tell me that my interest rate can vary. This information is there at the time of opening an account. I am not aware of ANY bank or building society that hides this.
My savings provider publishes the rate on their web site. They also report it via my online banking. No click needed once I reach my account page.
They have interest rate leaflets in their branches.
They write to me two months before any bonus drops off (some leave this until 14 days before, but all write for a material rate reduction).
They send me an annual statement with interest rates on. All do.
They provide me with an easy online option to add a bonus back to the account. I can also do this in a branch or by phone. Some don't.
My laptop, phone and tablet all offer a reminder facility that allows me to diarise future events. The local pound shop sells diaries. For £1.
Since the beginning of time interest rates on savings accounts have been able to vary. Never have consumers been given more information about this than they are now.
Yet some still blame the banks.
(Sigh) It's the times we live in - I can't possibly be expected to think for myself / take responsibility for my actions; it's always someone else's fault.0 -
droopsnoot wrote: »To be honest I find it difficult to motivate myself in view of the absolute amount returned - I know the headline interest rates are much better than elsewhere, but it translates to relatively small amounts of actual cash at the end of the year. I also have trouble with the direct debit requirements on many of these accounts, though I have recently read about the possibility of qualifying via DDs with Tesco. I will have another look around though, as I am regularly disappointed at the lack of returns, and perhaps I shouldn't turn my nose up at a few hundred pounds interest here or there. I worry about not keeping on top of things, getting the DDs out of sequence and ruining the lot for a year.
.
Well, I was with a bank I'd been with for 37 years. My interest rate on the account was 0% but recently we've come into a bit of spare cash.
We transferred to a Santander 123 for our main account, opened 2 x TSB Plus in mine and my DWs names, she opened a Halifax account just to get £5/month plus the £100 switch fee and we opened a Nationwide account for the cardholder benefits (plus 2.5% interest).
Net result of all the above, having filled most of them up to close, if not completely, to the limits - we worked out, with cashbacks, we'd be better off by approximately £360/year. Of course, this is starting from a 0% interest rate and depositing around £8.5k in various accounts.
Don't know about you but I wouldn't turn down circa £350 if someone wanted to give it to me for doing nothing more than opening a couple of bank accounts and setting up a few standing orders. It's my car insurance paid out of nothing.............
Edit reason: And the above are easy, no DDs apart from the Halifax which is 2 and setting up a couple of SOs to transfer money around - took us a few hours at most0 -
-
Don't know about you but I wouldn't turn down circa £350 if someone wanted to give it to me for doing nothing more than opening a couple of bank accounts and setting up a few standing orders. It's my car insurance paid out of nothing.............
I think that's a brilliant way of looking at it.
So many people complain about the cost of living and not having pay rises etc yet are perfectly happy to give away money that they could easily have. If someone took £350 off you then most people would rightly complain - yet by not organising your affairs properly that is effectively what you are doing.I agree with kangaroo. But a minor quibble...
The Santander 123 account(s) need DDs too.
True.
However TSB doesn't and allows transfers between 2 accounts to count as the funding requirement and they pay 5%.Remember the saying: if it looks too good to be true it almost certainly is.0 -
Don't know about you but I wouldn't turn down circa £350 if someone wanted to give it to me for doing nothing more than opening a couple of bank accounts and setting up a few standing orders. It's my car insurance paid out of nothing.............
It's a reasonable point of course, and one I've used before now with much smaller amounts - and as jimjames said, if someone wanted to take that amount from me, I'd be a bit annoyed. Although as someone else said, the 1-2-3 does require DDs, I can potentially get around that with Tesco, but there's still something holding me back that I can't define. After all, these accounts have been the best headline rate for quite a while now - it just seems that I should be applying myself to finding a way to get more, rather than 'settling' for this.0
This discussion has been closed.
Categories
- All Categories
- 343.4K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.8K Spending & Discounts
- 235.5K Work, Benefits & Business
- 608.4K Mortgages, Homes & Bills
- 173.2K Life & Family
- 248.1K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards