The Top Fixed Interest Savings Discussion Area

pecunianonolet

Alex9384 said:

Can someone explain me why some bank pulls their offer because "got all the funds they needed"?

I thought businessmen and especially bankers always need more and more?

If they need liquidity they source from the market, let's say target is 100 million. So they need to make a decent offer that you dedicate your cash to them for a fixed time. Usually, the longer you lock your cash away the higher is the theoretical risk of market turbulences, financial crisis, war, etc. so in turn to make it attractive the bank has to offer a higher rate. You could say the interest rate is the price of risk and uncertainty.

So when the bank has fulfilled their target of 100 million, they withdraw the offer. Now, they need to put that cash to good use for their long term strategy. A certain % has to be held in liquid assets e.g. cash as reserve, some to cover daily operations, covering operational cost and the rest is spread across different asset classes. That proportion may be gilts as the most conservative investment class as it is unlikely a country defaults. A proportion goes into lending, stocks, FX, etc. The aim is to spread that cash over short, medium and long term asset classes with low to high risk. In the end it is a hedge of different risk classes with the aim to provide a long term steady return.

So in order to pay you 6.1% for your fix they need to make somewhere else 6.1+%. So if you lock in at 6.1% today for a year, the bank might calculate that in 6 months time markets have shifted and they can receive a higher return in order to pay you the interest in a years time. In reality the longer you fix, the higher the premium should be. However, what we see is that rates are almost flat between 1,2 and even 3 year fixes and 4,5 and longer the rates decrease. This is in anticipation that rates peak short term, remain there for a while and start to slowly decrease. It's called an inverted yield curve. You could now overlay Kondratiev waves as well if you wish.

The cash the bank holds and is deposited overnight with the BOE gives a 5% return. So when rates were super low and central banks had even negative rates, e.g. the ECB, it means that banks need to find alternative income streams such as new or increased fees or had to charge customers to hold their cash. The very low long term lending agreements they hold from the past now cost them so lending is now more expensive, in part to offset and balance the sheets.

thegreenone

fabsaver said:

New table topping fixed rate bonds from FirstSave launched today.

1 year 6.10%
2 year 6.15%
3 year 5.95%

https://firstsave.co.uk/accounts/index.html

I got really excited as they offer monthly income and then read the small print at 3.  You can only make one payment into the account and that's it.  My bank only allows £25k transfers and I am very hesitant to do that to a bank I haven't done a small verification amount to.

Krakkkers

Transfer it to an easy access account there first?

Sea_Shell

For the first time with Raisin, I've been offered a renewal (Gatehouse), but a little disappointed that it's at their current standard rate, not a "special" rate.

Other than speed, saving a day or two, I can't see any benefit of doing a renewal, over just paying out and depositing it in the best available at the time.

Am I missing something?

moi

fabsaver said:

New table topping fixed rate bonds from FirstSave launched today.

1 year 6.10%
2 year 6.15%
3 year 5.95%

https://firstsave.co.uk/accounts/index.html

Does anyone have any experience with First Save? I've never heard of them. Their website looks a bit amateur.

refluxer

necronom said:

Assuming that the Charter Savings Bank starts their Bonds again at a good rate, does anyone know if they are easy to set up for someone without photo ID?  Some banks are quick and easy, some need documentation posting (sometimes with a signature from someone like a teacher), and some just won't let me join.

I didn't need photo ID to set up a fixed rate ISA with Charter but it did take them a staggering 8 weeks to verify my nominated bank account so just be aware of this if you've held the current account you choose for a long time or your application needs any form of intervention by them, as they are (or certainly were) incredibly slow to address issues that involve having to post off any proof of ID or nominated account (although I'd expect a normal fixed rate account to be easier to administer than an ISA, admittedly). I'd held my current account since the mid-1990s and have never had a problem having it verified by any other bank..

bristolleedsfan

moi said:

fabsaver said:

New table topping fixed rate bonds from FirstSave launched today.

1 year 6.10%
2 year 6.15%
3 year 5.95%

https://firstsave.co.uk/accounts/index.html

Does anyone have any experience with First Save? I've never heard of them. Their website looks a bit amateur.

Irony is second post on this thread from 2008 I found at random after searching FirstSave 

https://forums.moneysavingexpert.com/discussion/1169075/firstsave

A._Badger

refluxer said:

necronom said:

Assuming that the Charter Savings Bank starts their Bonds again at a good rate, does anyone know if they are easy to set up for someone without photo ID?  Some banks are quick and easy, some need documentation posting (sometimes with a signature from someone like a teacher), and some just won't let me join.

I didn't need photo ID to set up a fixed rate ISA with Charter but it did take them a staggering 8 weeks to verify my nominated bank account so just be aware of this if you've held the current account you choose for a long time or your application needs any form of intervention by them, as they are (or certainly were) incredibly slow to address issues that involve having to post off any proof of ID or nominated account (although I'd expect a normal fixed rate account to be easier to administer than an ISA, admittedly). I'd held my current account since the mid-1990s and have never had a problem having it verified by any other bank..

That's odd. Charter verified my Lloyds current account with no delay and I've held it since the 1970s. Strange are the ways of some of these institutions.

BooJewels

My recent application for a 2 year fix with Charter went through quickly and my letter to authenticate my account came the first day it could have and was sorted within minutes. I do have a passport though, so I don't know quite how they verify your ID.

I haven't yet had an answer to my secure message asking for clarification of exactly how to specify your reference in transfers, so I either walk away or bite the bullet and give it a go.  Ironically, I got an email reminding me to fund the account and in telling me how to do so, used a fifth permutation of characters.

vic_sf49

I've now had the welcome letter from Charter, with my account number on (7 digits), so now I understand what you @BooJewels and their FAQ are on about. 

I funded it prior to getting the paperwork, using the application reference number and my surname. (I mentioned this up thread somewhere.)

As you transfer it into their generic account, for them to put into your account, I wonder if it matters. So long as the reference corresponds to your personal account in some way.  

But you've got to be happy with where you're sending it.