Santander now rubbish - but who to switch too??

crumpet_man

What's the problem with having all your savings in a current account?  Providing that it pays the best interest on the amount of money held.  Back when current accounts had much better rates than savings accounts I had all my money distributed amongst the best current accounts and none in savings accounts.

colsten

There is nothing wrong with chasing down the best interest rates for your savings. However, long-term cash holdings can't keep up with inflation, meaning your money is losing purchasing power whilst all it does is earning interest. To stand a chance to beat inflation, you should invest at least some of your money, preferably in a tax wrapper such as an S&S ISA or a SIPP.

jonesMUFCforever

I'm slightly surprised that nobody seems to want to recommend NS&I these days - Income bonds or Premium bonds are low risk even for the shorter term until interest rates pick up again.

colsten

People do talk about them, over on the Savings & Investment board. 

Neither Income Bonds or Premium Bonds are suitable though for those wanting same day withdrawals. Income Bonds also only work in min. £500 deposit / withdrawal amounts.

chamelion

jonesMUFCforever said:

I'm slightly surprised that nobody seems to want to recommend NS&I these days - Income bonds or Premium bonds are low risk even for the shorter term until interest rates pick up again.

For a good chance of "winning" a rate higher than the meagre 1% from a savings account you'd need to drop 50k. 

People who have 50k+ to save would be using isa wrappers / funds / stocks rather than what is basically the lottery. 

born_again

jonesMUFCforever said:

I'm slightly surprised that nobody seems to want to recommend NS&I these days - Income bonds or Premium bonds are low risk even for the shorter term until interest rates pick up again.

ML mentions NS&i on the basis that their easy access account has a long change of interest rate timescale, compared to other accounts.
Premium bonds. Well you only get interest if you win. Bit like playing the lottery.

colsten

chamelion said:

People who have 50k+ to save would be using isa wrappers / funds / stocks rather than what is basically the lottery. 

I think that Premium Bonds are presently an excellent vehicle for the cash part of a balanced portfolio, especially for people with large S&S ISAs and pension investments. I know of a fair number of people who are maxing their ISAs annually and who also have £50K in PBs.

jonesMUFCforever

People post that Premium Bonds are like the Lottery - you are of course correct but with one BIG difference - you get your money back win or lose.

colsten

jonesMUFCforever said:

People post that Premium Bonds are like the Lottery - you are of course correct but with one BIG difference - you get your money back win or lose.

......minus any inflation. I.e. the purchasing power of your PB holdings reduces, even if you have average luck and winnings. Still, you could win big.........

stephenadarglas

chamelion said:

to me, makes sense to use BOS or Lloyds which give you 1% on amounts up to 3999, and then 2% for above this up to 5000. Combined with the santander lite for bills and cashback, you're sorted. 

Also, if you have the spare cash you can save upto £400 pound a month @ 2.5% per annum.