What is the actual point in savings account interest?

jimjames

Tackkers said:

steampowered said:

You say "anyone who can afford to maintain £10000 in a savings account" like it is unusual.

The vast majority of people can afford to have £10k in a savings account.

I would say that's nonsense and the vast majority don't have £10k in savings.

I agree, I was wondering if there was meant to be "can't" in the original statement which would make more sense to me.

When 40% have no savings it seems highly implausible that the "vast majority of people" have £10k in savings. Even friends who are relatively well paid don't appear to have that sort of amount.

Zola.

Instant liquidity for all debts and purchases. That's it. 

adindas

Anakah6 said:

From what I've seen, you'll get 1% if you're lucky.


For anyone who can afford to maintain £10000 in a savings account, an extra £100 a year is pretty inconsequential, no?

Money in the saving is a guarantee money losing strategy if the intention is to grow your money as the value of money will be eaten by the inflation. Not to mention the risk of having such amount of cash left in your home if this is what you mean.

However, for "some people" this is the best available option. Think about

- People who will need instant access (or similar) for the money such as money for house deposit needed in the near future.

- People who can not chance to lose a fraction of this £10,000.

- £100 a year is better than £0.

For people who could accommodate some level of calculated risk in return for the possibility of getting a much bigger reward, keeping money in saving account might not be the best option.

Thrugelmir

MX5huggy said:

ndf9876 said:

But what's the alternative? I'd rather *some* interest than none, of course - and keeping physical banknotes just isn't sensible in my opinion. So I'll opt for the savings account.

For fear of over doing the topic on here, This is why I have premium bonds I’m happy to risk getting nothing (or just a bit less than expected) for the chance of getting a useful chunk more. 

At least you can feel satisfaction in the fact that you are providing a cheap source of finance to the Treasury. 

coyrls

Thrugelmir said:

MX5huggy said:

ndf9876 said:

But what's the alternative? I'd rather *some* interest than none, of course - and keeping physical banknotes just isn't sensible in my opinion. So I'll opt for the savings account.

For fear of over doing the topic on here, This is why I have premium bonds I’m happy to risk getting nothing (or just a bit less than expected) for the chance of getting a useful chunk more. 

At least you can feel satisfaction in the fact that you are providing a cheap source of finance to the Treasury. 

Not cheap compared to issuing gilts at a far lower interest rate.