What will happen when interest rates rise?

michaels

Regular savers and most of the current accounts are hardly worth it for sensible amounts of money, with a couple of santanders you can make a dent but I have found children's savings accounts are the way to go, sure the adult still pays tax but for some reason the rates available are much more generous than to adults

Spidernick

But do you personally use the money in the kids' accounts for yourself, michaels? If so, and after your recent discussion around divorcing your wife for a tax gain, I wonder if I need to change my opinion of you!

As for midnight child's question: unless I kept the regular savings account secret, my wife would find something to spend it on once it matured. I am better off doing what I am and the difference in interest isn't that great with the amounts I'm overpaying by (although cumulatively they would mount up over time of course).

katejo

michaels wrote: »

Regular savers and most of the current accounts are hardly worth it for sensible amounts of money, with a couple of santanders you can make a dent but I have found children's savings accounts are the way to go, sure the adult still pays tax but for some reason the rates available are much more generous than to adults

I assumed that you had to be a child to have such an account. ie an adult could open one but only in the child's name.

Mistermeaner

He (she?) Didn't say the money is coming out. Just earning better interest

Sapphire

katejo wrote: »

I improved my kitchen for my own pleasure not to sell the house. I know that it will depreciate but, for the moment, it is much better than the old 80's kitchen which I had before.

I have to say that I always make improvements to my home for my own pleasure – not with the intention of making money from such improvements. I like creating surroundings to my own spec. and in my own style, over quite a long period of time, which prevents me from making mistakes and allows me to ensure that I have sufficient funds to not have to use cheap rubbish in the process. I would rather live with old stuff (provided it is functional) than spend money on downmarket things that don't last. I don't really care what anyone else thinks of them (though people who have seen my place seem to like what I end up with a lot).

chucknorris

Thrugelmir wrote: »

Value when making improvements are often in the eye of the beholder. A kitchen can cost many thousands of pounds. At the end of the day it's still just a kitchen. Like a new car over time it will depreciate and lose value.

Exactly, the fool should have bought some gold bars and had them buried with them in their coffin, then they would have (subject to the gold price) held their value. But what did they do? They wasted their money on things that will depreciate, just because it made their life more enjoyable, what an idiot!

Generali

chucknorris wrote: »

Exactly, the fool should have bought some gold bars and had them buried with them in their coffin, then they would have (subject to the gold price) held their value. But what did they do? They wasted their money on things that will depreciate, just because it made their life more enjoyable, what an idiot!

I just had a very nice bowl of chicken and pea risotto which I'm guessing will depreciate over the next 24 hours or so and be bothering Sydney Water in the next couple of days.

I could have spent the money I spent on making said risotto on a share in Sydney Water (if Sydney Water wasn't state owned) and had beans on toast but I reckon as a cancer survivor, which basically trumps everything, that life is for living not trying to buy shares which aren't for sale.

chucknorris

Generali wrote: »

I just had a very nice bowl of chicken and pea risotto which I'm guessing will depreciate over the next 24 hours or so and be bothering Sydney Water in the next couple of days.

I could have spent the money I spent on making said risotto on a share in Sydney Water (if Sydney Water wasn't state owned) and had beans on toast but I reckon as a cancer survivor, which basically trumps everything, that life is for living not trying to buy shares which aren't for sale.

You know, that last post of mine was aimed at me, as much as anyone else. I'm not finding it as easy as I thought that it would be, to change from investing for the future, to spending for the now (and later), but it needs to be done.

MFW_ASAP

midnight_child wrote: »

Well it would be typical for those with a large amount of equity, or those who got lucky and took out a tracker many years ago.

It is these people who likely have the most disposable income left each month (due to very low mortgage repayments), so are the people where the discussion on overpaying vs saving is most relevant.

@spidernick - Why not use regular saver or other fixed term savings accounts. As you would have no access to it during the period, zero risk it gets spent on shoes.

Putting aside the fact that people on <2% mortgages are atypical...

Some people are more motivated by reducing debt rather than increasing savings and so by making cirect overpayments are therefore more likely to stick at it when they see the balance reducing rather than putting it into a savings account and seeing the balance increasing.

I'm one of the former. I tend to build up my savings when I feel insecure so that I have a decen buffer, but always return to direct overpayments once I feel the savings are at a comfortable level.

I remember when I started the Mortgage Free in Three challenge a few years back (pre- credit crunch), we had a lot of people deriding us for having a 'sub-prime investment strategy'. They all vanished when people started queuing up outside Northern Rock, worring that they would lose their savings.....:rotfl:

midnight_child

I hear what you are saying about reducing debt vs building savings, though for those fortunate enough to have such a low rate building savings is clearly more efficient.


FSCS protection means your savings (up to 80K or whatever it is) are safe, so unless you truly minted you wont need to stand around queuing in the rain for 3 days.


It did get me thinking though that if my bank goes bust I should (according to the endless radio ads) get all my money back within 7 days. However, if I go bust the bank has to go through all the agro of repossessing my house and then trying to find a buyer, hoping that the sale price will realise enough cash to eventually recoup all their losses. Almost makes you feel sorry for them.


MC