Fixed Rate Savings Accounts - Rates likely to reduce

darren72

I'm expecting the current fixed rate savings accounts to either have their rates cut for new customers or withdrawn.

In light of this I think it is probably the best time for me to take out a new fixed rate savings account - haven't yet decided whether to go for 1, 2 or 3 year yet.

The best rates seem to be 1.5% for 1 year (United Trust) or 1.75% for 2 year (Bank of Cyprus) or 1.9% for 3 years (Investec).

Does anyone have any experience on any of these accounts and whether they are opened instantly when applying online ? - So you can immediately send funds over ? - In case they are withdrawn.

The rates are very poor, but I can only see them get worse....

markwilkinson

Its been a long time since I opened one of these and only have one that's active. I'm sure most of the ones I opened over the years were postal and needed a cheques with an application form. However, I think the last one I opened was done online with Virgin and was funded immediately when I opened the account, via online banking.

Don't know about the institutions you are intending to use though.

jimjames

1) The best rates are still current accounts.

2) If income is your main priority and are prepared to tie your money up you can get far better income by investing than keeping your money as cash deposits. Obviously you need some cash funds but money tied up for 3 years isn't exactly accessible. Even the yield from the FTSE is 3.5%

talexuser

It depends on the T&Cs of the particular account, you will need to see what they say.

I opened a 1 year fix at Charter last month for 1.79% when it became likely todays fall was not just rumour. Opened instantly online I had around 10 days to fund it before no more would be accepted. Other accounts "may" require the declared amount straight away.

darren72

jimjames wrote: »

1) The best rates are still current accounts.

The current accounts are all variable rates though so may change at any time. The fixed rates can't drop any further once taken out.

jimjames

darren72 wrote: »

The current accounts are all variable rates though so may change at any time. The fixed rates can't drop any further once taken out.

People have said that for the last 4 years. I'd prefer that risk and I still think they're unlikely to drop to the rates for these savings accounts. Even better why not do both if you've got sufficient cash.

teddysmum

darren72 wrote: »

The current accounts are all variable rates though so may change at any time. The fixed rates can't drop any further once taken out.

Not all. Nationwide is a fixed 5% but for one year only.

Ifts

darren72 wrote: »

Does anyone have any experience on any of these accounts and whether they are opened instantly when applying online ? - So you can immediately send funds over ? - In case they are withdrawn.

As mentioned by telexuser it all depends on the accounts T&Cs.

The last fixed term I opened was Secure Trust Banks 2 year @ 2.2% last month (thanks to buffman for the heads up): https://forums.moneysavingexpert.com/discussion/5491269
Opened online instantly and issued with a account opening reference number - so I posted them a cheque (with reference number on the back). A few days later they sent me the account number and sort-code in the post. Even though the product got withdrawn within a few days of being launched they are letting you add to it up to 8th August (I added to mine on Wednesday using FP's).

All the ones Ive opened over the years give you a certain amount of time to pay money in and if you do that before the cut off date you're fine. Never had one where I got accepted and was unable to fund it because it got withdrawn soon after opening.

Most important thing is to open it before it gets withdrawn (best buys tend to get withdrawn quick - some on the same day they are launched!).

Sometimes I get to hear of new offers from being an existing customer or where I have signed up to the banks email alert for new offerings.

I also use: http://moneyfacts.co.uk/savings/fixed-rate-bonds/ to see whats on offer.

Ifts

darren72 wrote: »

In light of this I think it is probably the best time for me to take out a new fixed rate savings account - haven't yet decided whether to go for 1, 2 or 3 year yet.

Forgot to say if you do apply for one of the ones you have listed before they get withdrawn, if your application is successful you can decide during the cut off time for depositing money into it and if you change your mind just let the application lapse (I've done that before, no probs).

2010

jimjames wrote: »

If income is your main priority and are prepared to tie your money up you can get far better income by investing than keeping your money as cash deposits.

The value of the investment can go down as well as up and you may not get back as much as you put in.

darren72

teddysmum wrote: »

Not all. Nationwide is a fixed 5% but for one year only.

Can the Nationwide 5% fixed account be opened without 'switching' from another current account ? - Is the £1000/month deposit the only requirement ?