Saving rates

surreysaver

I thought the banks knee-jerked a bit, and rates have settled down a few percentage points.
I secured Virgin's 2 year ISA at 4.28% before it was pulled (I'll be paying tax on my savings interest next year, so better off with an ISA)

trickydicky14

I’m no sooth Sayer but I do scratch my head when over the past few months, I see daily comments like, “I think I’m going to wait for the next BOE announcement”. I can see some logic in this going back a while but now I see folks who have not only missed the boat (my opinion) but have had cash stuck in instant access accounts paying possibly have the rate of fixed accounts for months.

Some have been more prudent and opened accounts over a period of time, but some will walk away with little to show. You would need to secure rates much higher then currently available to claw back lost interest, just my thoughts mind you. It’s akin to rushing round Aldi’s at five o’clock on Christmas eve trying to grab the last few inferior Brussel sprouts that nobody else wants.

Bacman

Savings rates are dependant upon what a financial institution is prepared to buy money for from investors, if they need an influx of cash and see an opportunity they will offer good rates to get the cash influx quickly and hope to make a good profit. Since the Budget last week, they have seen slow gains to be made (including in the housing market) so therefore pull out their offers on fixed rate bonds or reduce them.

Some banks/etc have reduced their offers by a fraction of a percent, some like Nationwide who offered 4.75% a fortnight ago have reduced to 3.5% now.

Whilst an increase in rates for savings can result in higher offers for fixed rate bonds, they are unrelated. As with all investments, only make them if you can afford to tie your money in for a period without access to it; also be happy with the rate you decided to accept whether it goes up or down in the future - that is the reality with any investments. Too easy to be greedy, remember at the start of the year rates for savings were only about 1.5% ?

Albermarle

Bacman said:

Savings rates are dependant upon what a financial institution is prepared to buy money for from investors, if they need an influx of cash and see an opportunity they will offer good rates to get the cash influx quickly and hope to make a good profit. Since the Budget last week, they have seen slow gains to be made (including in the housing market) so therefore pull out their offers on fixed rate bonds or reduce them.

Some banks/etc have reduced their offers by a fraction of a percent, some like Nationwide who offered 4.75% a fortnight ago have reduced to 3.5% now.

Whilst an increase in rates for savings can result in higher offers for fixed rate bonds, they are unrelated. As with all investments, only make them if you can afford to tie your money in for a period without access to it; also be happy with the rate you decided to accept whether it goes up or down in the future - that is the reality with any investments. Too easy to be greedy, remember at the start of the year rates for savings were only about 1.5% ?

In addition to the above, when a provider looks to offer a long fixed term, it does not just look at the situation today, but also how they think it might look in 3 or 5 years time. If they think (and most do) that interest rates will have dropped by the, they will take this into account when making an offer.

bristolleedsfan

trickydicky14 said:

I’m no sooth Sayer but I do scratch my head when over the past few months, I see daily comments like, “I think I’m going to wait for the next BOE announcement”. I can see some logic in this going back a while but now I see folks who have not only missed the boat (my opinion) but have had cash stuck in instant access accounts paying possibly have the rate of fixed accounts for months.

Some have been more prudent and opened accounts over a period of time, but some will walk away with little to show. You would need to secure rates much higher then currently available to claw back lost interest, just my thoughts mind you. It’s akin to rushing round Aldi’s at five o’clock on Christmas eve trying to grab the last few inferior Brussel sprouts that nobody else wants.

Also those who fixed for 12 months at lower rates a few months ago for example during August might get a higher fixed rate next August than those who fixed for 12 months during November might get next November ....

Money_Grabber13579

bristolleedsfan said:

trickydicky14 said:

I’m no sooth Sayer but I do scratch my head when over the past few months, I see daily comments like, “I think I’m going to wait for the next BOE announcement”. I can see some logic in this going back a while but now I see folks who have not only missed the boat (my opinion) but have had cash stuck in instant access accounts paying possibly have the rate of fixed accounts for months.

Some have been more prudent and opened accounts over a period of time, but some will walk away with little to show. You would need to secure rates much higher then currently available to claw back lost interest, just my thoughts mind you. It’s akin to rushing round Aldi’s at five o’clock on Christmas eve trying to grab the last few inferior Brussel sprouts that nobody else wants.

Also those who fixed for 12 months at lower rates a few months ago for example during August might get a higher fixed rate next August than those who fixed for 12 months during November might get next November ....

Or they might get a lower rate…

RobM99

remember just months ago people were saying "Ooh look! Chase offering 1.5%!" Feeble now!

Bobziz

Bacman said:

Savings rates are dependant upon what a financial institution is prepared to buy money for from investors, if they need an influx of cash and see an opportunity they will offer good rates to get the cash influx quickly and hope to make a good profit. Since the Budget last week, they have seen slow gains to be made (including in the housing market) so therefore pull out their offers on fixed rate bonds or reduce them.

Some banks/etc have reduced their offers by a fraction of a percent, some like Nationwide who offered 4.75% a fortnight ago have reduced to 3.5% now.

Whilst an increase in rates for savings can result in higher offers for fixed rate bonds, they are unrelated. As with all investments, only make them if you can afford to tie your money in for a period without access to it; also be happy with the rate you decided to accept whether it goes up or down in the future - that is the reality with any investments. Too easy to be greedy, remember at the start of the year rates for savings were only about 1.5% ?

Where are you seeing the NW reduction from 4.75 to 3.5 ? 4.75 still available on the website.

refluxer

Bobziz said:

Bacman said:

Savings rates are dependant upon what a financial institution is prepared to buy money for from investors, if they need an influx of cash and see an opportunity they will offer good rates to get the cash influx quickly and hope to make a good profit. Since the Budget last week, they have seen slow gains to be made (including in the housing market) so therefore pull out their offers on fixed rate bonds or reduce them.

Some banks/etc have reduced their offers by a fraction of a percent, some like Nationwide who offered 4.75% a fortnight ago have reduced to 3.5% now.

Whilst an increase in rates for savings can result in higher offers for fixed rate bonds, they are unrelated. As with all investments, only make them if you can afford to tie your money in for a period without access to it; also be happy with the rate you decided to accept whether it goes up or down in the future - that is the reality with any investments. Too easy to be greedy, remember at the start of the year rates for savings were only about 1.5% ?

Where are you seeing the NW reduction from 4.75 to 3.5 ? 4.75 still available on the website.

Yep - Nationwide's online bonds have been pretty static at 4% to 4.75% for 1 to 3 years for at least a month or so, so that statement wasn't right. It's their branch-only bonds that offer much lower rates, of which 3.5% (for 2 years) is one.

Alistair31

Devastated?