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NS&I could cut rates and close products
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- Lemon Slice
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NS&I could cut rates and close products
National Savings & Investments has suggested that it could cut interest rates further and close products after a record sum of nearly £40 billion was invested by savers during lockdown. The Treasury-owned body said yesterday that it had accumulated £38.3 billion in the first six months of the financial year as older savers deposited cash, with £23.8 billion raised between July and September. - The Times
Fri 23 Oct 2020
From: https://www.sharecast.com/news/press-round-up-short-premium/friday-newspaper-round-up-driverless-cars-nsi-household-wealth--7687017.html
The Times has the articles but has a paywall
See e.g. https://www.google.com/search?&q=site:thetimes.co.uk+"National+Savings+%26+Investments"
Fri 23 Oct 2020
From: https://www.sharecast.com/news/press-round-up-short-premium/friday-newspaper-round-up-driverless-cars-nsi-household-wealth--7687017.html
The Times has the articles but has a paywall
See e.g. https://www.google.com/search?&q=site:thetimes.co.uk+"National+Savings+%26+Investments"
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- Lemon Half
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Re: NS&I could cut rates and close products
could cut interest rates further
Difficult to do on some products without going negative
My ISA money left NS&I after recent cuts and I'm sure there must have been a significant outflow
Difficult to do on some products without going negative
My ISA money left NS&I after recent cuts and I'm sure there must have been a significant outflow
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- Lemon Slice
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Re: NS&I could cut rates and close products
AleisterCrowley wrote:could cut interest rates further
Difficult to do on some products without going negative
My ISA money left NS&I after recent cuts and I'm sure there must have been a significant outflow
I've given up moving my money around. As soon as I do so the new bank reduces their rates.
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- Lemon Half
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Re: NS&I could cut rates and close products
I ended up with two Paragon ISAs: a 1 year and 2 year fix. Kicks the problem down the road, so I don't have to shift cash around until next September earliest
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- Lemon Quarter
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Re: NS&I could cut rates and close products
Mike88 wrote:AleisterCrowley wrote:could cut interest rates further
Difficult to do on some products without going negative
My ISA money left NS&I after recent cuts and I'm sure there must have been a significant outflow
I've given up moving my money around. As soon as I do so the new bank reduces their rates.
I have too.
For the time being I'm keeping some funds in the NS&I Direct Saver but have moved a fair chunk into Premium Bonds.
I know the effective rate for PBs has reduced and probably will again, but with rates generally as poor as they are, I thought I might as well at least have the chance of a win. If I only get an odd £25 its better than the likely interest in any savings account.
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- Lemon Slice
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Re: NS&I could cut rates and close products
I wonder how much they will have left after the November rate cuts hit and money is withdrawn. I will certainly be checking the rates and movimg if I find a better deal. I am glad I kept my coventry BS savings account as 0.55% looks good now?
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- Lemon Quarter
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Re: NS&I could cut rates and close products
Contrary to my expectations, I've just had the maturity letter for my 3-year Investment Guaranteed Growth Bond (taken out 3 years ago - when IIRC it was limited to £3000 each, or £6000 in a joint account) which is currently paying 2.2%.
If I let it auto-renew into a 3-year Guaranteed Growth Bond, it's 1.3%* (unless rates go up before the new bond starts ). There are different (but not guaranteed) rates for different terms.
It's only a small pot but 1.3% is a pretty good fixed rate I think
*only available to customers renewing a maturing
Guaranteed Growth Bond or Investment Guaranteed Growth Bond
If I let it auto-renew into a 3-year Guaranteed Growth Bond, it's 1.3%* (unless rates go up before the new bond starts ). There are different (but not guaranteed) rates for different terms.
It's only a small pot but 1.3% is a pretty good fixed rate I think
*only available to customers renewing a maturing
Guaranteed Growth Bond or Investment Guaranteed Growth Bond
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- Lemon Quarter
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Re: NS&I could cut rates and close products
seagles wrote:I wonder how much they will have left after the November rate cuts hit and money is withdrawn. I will certainly be checking the rates and movimg if I find a better deal. I am glad I kept my coventry BS savings account as 0.55% looks good now?
When the NS&I rate cuts were announced, I opened a Cov BS Double Access saver account, variable rate at 1.19% gross, and deposited a nominal amount. A few days later, I created an account for my wife, but the rate was then variable 1.10% gross. Today, there is no sign of the Double Access Saver option on the Cov BS website, yet when I log in to my account, I still see 1.19% for me and 1.10% for my wife.
Being a variable rate account, I'm rather confused why the rate hasn't reduced. I think I'll sit tight for a while before I move a larger amount in
--kiloran
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- Lemon Pip
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Re: NS&I could cut rates and close products
My wife and I have direct saver accounts and Premium Bonds. We'll keep the PB's as we have sufficient to expect an average return over time but the direct saver accounts will definitely be closed when the rate drops. I'm confident I can do better by buying dividend paying stocks or ETF's without taking undue risk.
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- Lemon Slice
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Re: NS&I could cut rates and close products
kiloran wrote:seagles wrote:I wonder how much they will have left after the November rate cuts hit and money is withdrawn. I will certainly be checking the rates and movimg if I find a better deal. I am glad I kept my coventry BS savings account as 0.55% looks good now?
When the NS&I rate cuts were announced, I opened a Cov BS Double Access saver account, variable rate at 1.19% gross, and deposited a nominal amount. A few days later, I created an account for my wife, but the rate was then variable 1.10% gross. Today, there is no sign of the Double Access Saver option on the Cov BS website, yet when I log in to my account, I still see 1.19% for me and 1.10% for my wife.
Being a variable rate account, I'm rather confused why the rate hasn't reduced. I think I'll sit tight for a while before I move a larger amount in
--kiloran
Coventry have a history of keeping rates for existing customers (for a while anyway) and stopping them for "new" applicants. Both my daughter and I have had rates for years that do not appear on their web pages.
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- Lemon Slice
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Re: NS&I could cut rates and close products
yorkshirelad1 wrote:National Savings & Investments has suggested that it could cut interest rates further and close products after a record sum of nearly £40 billion was invested by savers during lockdown. The Treasury-owned body said yesterday that it had accumulated £38.3 billion in the first six months of the financial year as older savers deposited cash, with £23.8 billion raised between July and September. - The Times
Fri 23 Oct 2020
From: https://www.sharecast.com/news/press-round-up-short-premium/friday-newspaper-round-up-driverless-cars-nsi-household-wealth--7687017.html
The Times has the articles but has a paywall
See e.g. https://www.google.com/search?&q=site:thetimes.co.uk+"National+Savings+%26+Investments"
Well, I'm not sure if NSandI see me as an "older saver" as I'm over 50 but they are mistaken if they think us older savers aren't savvy enough to move our money. I expect what is trickling out now will turn into a flood out in the last week before rates move to zero. I hope their systems are ready for it.
The fact they are thinking about cutting rates and products further before they see the extent of the withdrawals in the second half of November suggests to me they either haven't got a scooby what they are doing (most likely) or they see even after the November withdrawals they've still got too much cash.
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- Lemon Half
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Re: NS&I could cut rates and close products
Gan020 wrote:The fact they are thinking about cutting rates and products further before they see the extent of the withdrawals in the second half of November suggests to me they either haven't got a scooby what they are doing (most likely) or they see even after the November withdrawals they've still got too much cash.
Well in their results press release yesterday they said:
On 21 September 2020, NS&I announced interest rate reductions, effective from 24 November 2020, that will apply to NS&I’s variable rate products and some fixed term products. These interest rate reductions aim to help NS&I manage Net Financing ...
https://nsandi-corporate.com/news-resea ... 21-results
So from that they seem to be well aware that there's going to be an outflow. There's no suggestion there that they plan to make any further cuts.
Wonder where the Times got their story? They couldn't have made it up by any chance could they?
Scott.
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- Lemon Quarter
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Re: NS&I could cut rates and close products
It will be interesting to see what happens to the index-linked certificates. A few years ago, we were all gnashing our teeth at their decision to change from RPI + 0.5% to CPI+ 0.01%. For me, this will kick in next May. How ironic if the CPI certs end up giving a better return than anywhere else. But it's certainly looking that way.
Steve
Steve
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- Lemon Quarter
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Re: NS&I could cut rates and close products
kiloran wrote:seagles wrote:I wonder how much they will have left after the November rate cuts hit and money is withdrawn. I will certainly be checking the rates and movimg if I find a better deal. I am glad I kept my coventry BS savings account as 0.55% looks good now?
When the NS&I rate cuts were announced, I opened a Cov BS Double Access saver account, variable rate at 1.19% gross, and deposited a nominal amount. A few days later, I created an account for my wife, but the rate was then variable 1.10% gross. Today, there is no sign of the Double Access Saver option on the Cov BS website, yet when I log in to my account, I still see 1.19% for me and 1.10% for my wife.
Being a variable rate account, I'm rather confused why the rate hasn't reduced. I think I'll sit tight for a while before I move a larger amount in
--kiloran
It's because of this sort of thing I'm leaving mine with NS&I. Yes, the rate is poor but I'm convinced all will follow suit and reduce any rate which currently looks more attractive. The hassle of moving money to get an extra fraction of a percent then find the difference only lasts a few days or weeks makes it all rather pointless.
Who knows. If NS&I see a huge outflow of money, they may be forced to push their rate up a bit...
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- Lemon Half
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Re: NS&I could cut rates and close products
Put your money in fixed rate accounts. Ideally last month...
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- Lemon Quarter
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Re: NS&I could cut rates and close products
AleisterCrowley wrote:Put your money in fixed rate accounts. Ideally last month...
Good plan
Seriously though, even relatively long ties don't seem to offer much more than the instant access accounts.
Getting one percent rather than half a percent might be double, but double almost nothing is still not worth a candle.
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- Lemon Slice
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Re: NS&I could cut rates and close products
chas49 wrote:Contrary to my expectations, I've just had the maturity letter for my 3-year Investment Guaranteed Growth Bond (taken out 3 years ago - when IIRC it was limited to £3000 each, or £6000 in a joint account) which is currently paying 2.2%.
If I let it auto-renew into a 3-year Guaranteed Growth Bond, it's 1.3%* (unless rates go up before the new bond starts ). There are different (but not guaranteed) rates for different terms.
That's interesting as we have quite a bit of money in these which mature in December. The only thing that puts me off reinvesting is that when taken out in 2017, the money was accessible (with 90 days loss of interest) whereas with the new terms, the money is locked in. We'll see what rate is on offer before making a decision.
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- Lemon Half
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Re: NS&I could cut rates and close products
ISAs seem to be typically lower rates than 'unprotected' savings accounts
Paragon Cash ISA 1yr 0.6%, 2yr 0.7%
Paragon fixed rate 1yr 0.8%, 2yr 0.9%
(as of now) so 20bp difference
I opened ISAs with my NS&I and Nationwide money (transfers in) and got 0.85% on the 1yr (opened 25 Aug)... the 2yr (transfer from NS&I) is still showing as incomplete...
Paragon Cash ISA 1yr 0.6%, 2yr 0.7%
Paragon fixed rate 1yr 0.8%, 2yr 0.9%
(as of now) so 20bp difference
I opened ISAs with my NS&I and Nationwide money (transfers in) and got 0.85% on the 1yr (opened 25 Aug)... the 2yr (transfer from NS&I) is still showing as incomplete...
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- Lemon Half
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Re: NS&I could cut rates and close products
staffordian wrote:I know the effective rate for PBs has reduced and probably will again, but with rates generally as poor as they are, I thought I might as well at least have the chance of a win. If I only get an odd £25 its better than the likely interest in any savings account.
This. Even with the planned reduction, it was still better than anything I could find as an alternative short of tieing cash up for five years (and then not a significantly better better return anyway).
didds
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- Lemon Half
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Re: NS&I could cut rates and close products
staffordian wrote:Seriously though, even relatively long ties don't seem to offer much more than the instant access accounts.
Getting one percent rather than half a percent might be double, but double almost nothing is still not worth a candle.
This ^^^^
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