The Lemon Fool

Yorkshire Building Society seem to have a reasonable rate for the amount I have with NSandI. If the rate does decrease, I will be moving it all to YBS (assuming their rate stays as attractive) within a few days. No connection other than previous customer...

https://www.ybs.co.uk/savings/product.html?id=YB681237W

N.B. The reason I left was because they had a historically marvelous account (lowish variable amount +3.5% if I deposited £25 a month and only made one withdrawal per year), but they reduced the bonus too far to be competitive. I don't think any decent rates will last, but on amounts over £10,000, chasing the best is worth about £10 a month (at the moment)

With the BoE now asking banks about their readiness for negative interest rates I fear the minimal rates from November on NS&I may in the fullness of time look quite attractive

https://www.ft.com/content/7994e660-eaf ... 7663f16ceb

Gan020 wrote:Let's see what happens. NSandI instant access rate moving from 1.16% to 0.01%
Current best buys none of which have fallen since NSandI annoucement a week ago
5yr 1.60%
3yr 1.45%
2yr 1.36%
1yr 1.30%
Instant Access 0.8% (there are many options between 0.7% and 0.8%)

2½ weeks later rates look like this
5yr 1.60%
3yr 1.46%
2yr 1.37%
1yr 1.27%
Instant Access 0.8% (although YBS were paying 0.9% about £10k and West Brom are still offering 0.9%

Although rates haven't fallen the number of providers offering fixed term deals has thinned.

I'm expecting a rush of money out of NSandI as we get closer to the deadline of 24th November. That's some time away yet.

Gan020 wrote:

Gan020 wrote:Let's see what happens. NSandI instant access rate moving from 1.16% to 0.01%
Current best buys none of which have fallen since NSandI annoucement a week ago
5yr 1.60%
3yr 1.45%
2yr 1.36%
1yr 1.30%
Instant Access 0.8% (there are many options between 0.7% and 0.8%)

2½ weeks later rates look like this
5yr 1.60%
3yr 1.46%
2yr 1.37%
1yr 1.27%
Instant Access 0.8% (although YBS were paying 0.9% about £10k and West Brom are still offering 0.9%

Although rates haven't fallen the number of providers offering fixed term deals has thinned.

I'm expecting a rush of money out of NSandI as we get closer to the deadline of 24th November. That's some time away yet.

Another 2 weeks passes and rates have now collapsed for up to 2 year money. I expect this will continue through November as the NSandI money exits and then the pattern will change through December and January as 1)savings are spent on Christmas 2)end of furlough 3)some deferred self-assessment tax which was due in July is now due end January

5yr 1.55%
3yr 1.42%
2yr 1.26%
1yr 1.08%
Instant Access 0.8% (YBS are the only one left offering this rate

I have some 6 months bonds which I took out in May at 1.45% expiring in November, which normally I would have rolled into a 2yr bond. Best I can get is 1.26% vs I have a legacy instant access offering 1.0% so instant access it will be as locking money up for 2 years for an extra 0.26% doesn't attract.

Have you seen their new website? Might give you a laugh or at least a wry smile in view of current rates. I particularly enjoyed their question as to whether you had won a premium bond prize and to "tell us on Facebook".

I'll now have to look up my holder's number as my computer is not entering it on the new site On the other hand, the chance of winning anything worthwhile is so remote, I might as well wait till they tell me if perchance I do.

From Bloomberg (my bold font):

"Traders are building the risk of Federal Reserve hikes back into interest-rate markets following news of the most encouraging scientific advancement so far toward a coronavirus vaccine. The sudden improvement in the economic outlook prompted a fresh burst of trade in Eurodollar futures, which are hugely popular as a low-cost way to play the Fed outlook. As daily volumes of contracts surged to the most since March, prices tumbled sharply, reflecting a flurry of bets on higher interest rates. As front-end rates jolted higher, overnight index swap markets -- a proxy for the Fed’s policy rate -- show pricing for a quarter-point hike around the fourth quarter of 2023, and a second by the end of 2024.

ECB Easing
Rate hikes by the European Central Bank are not on the horizon yet, though investors trimmed bets on further easing and exited haven trades following the vaccine report. Money markets pared the odds of easing by almost half by the end of next year, betting on a 6 basis point rate cut, compared with 11 basis points at the end of last week.

BOE Bets
Similarly, Bank of England easing bets have been slashed, banishing the prospect of negative interest rates. Investors, who had bet on a 10 basis-point cut by August and sub-zero rates by the end of 2021, no longer expect the BOE to cut rates to 0%. Instead, wagers are for 7 basis points of easing by the end of next year."

The outlook for savings rates in Sterling is still gloomy but maybe not quite so much now.

langley59 wrote: Investors ... no longer expect the BOE to cut rates to 0%. Instead, wagers are for 7 basis points of easing by the end of next year."

Financial journalism in the interest rate market hasn't improved a hell of a lot in the 4 years since I said goodbye. It was pretty awful in my 25 years in the industry.

So with Base Rate at 0.10% currently the journalists are telling us that "investors" (sic) no longer expect rates to go to 0.00% but instead to 0.03%!

dealtn wrote:

langley59 wrote: Investors ... no longer expect the BOE to cut rates to 0%. Instead, wagers are for 7 basis points of easing by the end of next year."

Financial journalism in the interest rate market hasn't improved a hell of a lot in the 4 years since I said goodbye. It was pretty awful in my 25 years in the industry.

So with Base Rate at 0.10% currently the journalists are telling us that "investors" (sic) no longer expect rates to go to 0.00% but instead to 0.03%!

Agreed. But at least thats better than -0.5%.

Just a reminder that from tomorrow the rate on the NS&I Direct Saver reduces from 1% to 0.1%, so get it out!

Our income bond funds are currently in transit from NS&I to my nominated bank account. We also have 3 year growth bonds that mature next month and the option to renew them sees the interest rate drop from 2.15% to around 0.3%. They will be leaving NS&I as well. We'll keep the premium bonds for now as they have been good to us over the years.

scrumpyjack wrote:Just a reminder that from tomorrow the rate on the NS&I Direct Saver reduces from 1% to 0.1%, so get it out!

Thanks for reminder.

I've pulled all mine out now with the last tranche today. Unsurprisingly their automated phone call system to validate I was who I said I was struggled. Completely failed the first time, but success on attempt 2.

I note savings rates for instant access and short term bonds have now fallen quite a bit in the last 2 weeks in the best buy tables.

Hopefully by the end of the week 95% of people planning to withdraw their money from NSandI will have done so and rates will start to recover as we head into the new year

For info, might be of use to somebody ?

I'm transferring my NS&I Direct ISA to a Paragon 2 year fix ISA
Checking recently , the Paragon account was open but showing £0-00 balance
I sent them a secure message and apparently;
-NS&I insist on a paper copy of the transfer form
-The Paragon website had a bug so this wasn't flagged up when doing the online application, and they couldn't identify affected applicants

So, I've had to download the form and a neighbour is printing it off. Paragon have given me 28 days from the message date to guarantee the 1% rate

regards
AC

I have now successfully removed, and closed my NS&I Income Bond account (I've kept my Premium Bonds) and can report from my end at least that I have witnessed no delay (beyond their next day for <=50k promise). I can't help but think they must be pretty busy over there today.

C.

Redmires wrote:We'll keep the premium bonds for now as they have been good to us over the years.

AIUI though whilst the "yield" of PBs is lowering also they still in theory provide a better likely return than pretty much any other "instant access" savings?

didds

Martin Lewis' latest calculations suggest that with mean luck one could expect to receive 0.7%. So I think;

didds wrote:AIUI though whilst the "yield" of PBs is lowerign they still in theory provide a better likely return than pretty mich any other "instant access" savings?

you are correct.

(I can't yet post a link to what I would like but his calculations are available on his website)

For those 'fortunate' enough they also pay a tax free return which I think is why many people find them appealing.

C.

WrongLicence388 wrote:Martin Lewis' latest calculations suggest that with mean luck one could expect to receive 0.7%. So I think;

didds wrote:AIUI though whilst the "yield" of PBs is lowerign they still in theory provide a better likely return than pretty mich any other "instant access" savings?

you are correct.

(I can't yet post a link to what I would like but his calculations are available on his website)

For those 'fortunate' enough they also pay a tax free return which I think is why many people find them appealing.

C.

After a post or so more you'll be able to post links***. As for Premium Bonds, there's an ongoing thread here https://www.lemonfool.co.uk/viewtopic.php?p=355250#p355250 which some of us update for fun I suppose. The Martin Lewis website link appears there every so often, so I'll not repeat it here.

More specifically, I may have lost a day's interest (I didn't bother checking as otherwise engaged tomorrow) but the automated Income Bonds withdrawal process was simplicity in itself, as you indicated earlier. At least today is Monday, so it should all be done and dusted a couple of days or so before the weekend!

*** You may already be able. Try at Testing 123... Feel free to test your posts. all deleted regularly https://www.lemonfool.co.uk/viewforum.php?f=28. If at first you don't succeed, post a couple more times over there!

Just received notification that Yorkshire Building Society are reducing the rate on my legacy instant access from 1.0% to 0.45%. It would seem far more has flooded out of NSandI then some anticipated.

I feel like I'm chasing my tail here. I could move it again to get 0.6% but I expect that within weeks of doing that whoever is at 0.6% won't want my money either.

Roll on January when the Treasury normally takes in loads of cash from corporation tax, although this is the last year they will be collecting much of that!

OT but re:

Gan020 wrote:... Roll on January when the Treasury normally takes in loads of cash from corporation tax, although this is the last year they will be collecting much of that!

Those corporations incurring massive tax trading losses in their current AP will most likely, depending on their circumstances, be claiming to carry back those losses, such that the CT payments normally becoming due on or before 1 January 2021 will be reduced to about £nil.

They may even already be claiming or have already received CT repayments:

https://www.icaew.com/insights/tax-news/2020/jun-2020/covid19-repayment-of-corporation-tax

Silly me - I somehow forgot to move out of my income bond with NS&! last November. Fortunately triggered off by annual statement where I can see my monthly return has fallen from some £48 last October to 40p. Effectively my forgetfulness has cost me some £70 (based on getting 0.4% elsewhere). Grrrrr

Hopefully other Fools have not been so foolish.

T7