Really p****d off with savings rates!

[stevensfo]

Yes, a naive question and I instinctively know the answer, but why the hell are the fixed term savings rates falling as the UK interest rates increase?

It started when they went to 3%. Now at 3.5%, the rates offered by AJBell and Monzo are lower than they were months ago.

I'm sure that the mortgage and loan rates follow the UK rate increase, so why do they bring down the savings rates?

Bah Humbug!

What the banks need is another Guy Fawkes!

Steve

PS Even if the gunpowder went off, in the average High street, most people probably wouldn't notice a difference!

[richlist]

What makes you think that interest rates on savings accounts are linked to bank base rates ? They arent.

Perhaps you would benefit from looking at regular savings accounts. Lots available.....First Direct paying 7%, Coventry b/soc paying 5% are just two examples.

[Lootman]

What makes you think that interest rates on savings accounts are linked to bank base rates ? They arent.

Perhaps you would benefit from looking at regular savings accounts. Lots available.....First Direct paying 7%, Coventry b/soc paying 5% are just two examples.

When I see those kinds of teaser rates there is invariably some catch to it. Usually that rate only applies to relatively small amounts and so you end up needing a few or even many of them. And then of course the institution with the best rate changes month by month. So you end up constantly chopping and changing, chasing your tail, and frankly that is more trouble than it is worth. Not to mention a pig for doing your taxes.

So I have decided that I am not going to bother with savings accounts. Banks manipulate both saving rates and lending rates to suit themselves. The margin is huge and yet still the banks don't seem to do very well. I just use a money market fund within my sharedealing account.

[Urbandreamer]

...So I have decided that I am not going to bother with savings accounts. Banks manipulate both saving rates and lending rates to suit themselves. The margin is huge and yet still the banks don't seem to do very well.

Indeed. However, what do you actually do with your money?

Personally, I keep enough to meet expected expenses and invest the rest. Or to put it another way, convert it into something that doesn't suffer a known, expected, depreciation.

Saving something that devalues at the current rate doesn't seem all that great an idea to me.

[Adamski]

Cash has been losing money in real terms a long time. No choice but to invest in property or stocks (except obvs bad year this year) but 5 year returns should beat inflation.

[Lootman]

...So I have decided that I am not going to bother with savings accounts. Banks manipulate both saving rates and lending rates to suit themselves. The margin is huge and yet still the banks don't seem to do very well.

Indeed. However, what do you actually do with your money?

Personally, I keep enough to meet expected expenses and invest the rest. Or to put it another way, convert it into something that doesn't suffer a known, expected, depreciation.

Saving something that devalues at the current rate doesn't seem all that great an idea to me.

I have two current accounts with 30K and 60K respectively, for everyday expenses.

100K in a money market fund in my share-dealing account. Plus about 40K there in cash for possible purchases of shares.

My interest is less than the current zero-rate band for interest, so no tax issues.

[richlist]

What makes you think that interest rates on savings accounts are linked to bank base rates ? They arent.

Perhaps you would benefit from looking at regular savings accounts. Lots available.....First Direct paying 7%, Coventry b/soc paying 5% are just two examples.

When I see those kinds of teaser rates there is invariably some catch to it. Usually that rate only applies to relatively small amounts and so you end up needing a few or even many of them. And then of course the institution with the best rate changes month by month.

The Coventry b/soc regular saver stands out in that :
* Easy to open on line.
* You can save £1000 per month.
* It pays 5%.
* It can run for up to 3 years.
* You can access your money penalty free at any time.

[bluedonkey]

Coventry doesn't appear to be paying 5 per cent. Do you have a link?

[richlist]

Sorry, small mistake on my part.....
Coventry FHS account currently pays 2.95%. The rate on that account increases to 5% on January 6th.

[mike]

Sorry, small mistake on my part.....
Coventry FHS account currently pays 2.95%. The rate on that account increases to 5% on January 6th.

The FHS account is their First Home Saver account, but it is closed to new applications as of today.
https://www.coventrybuildingsociety.co.uk/member/savings/closed-accounts.html

Their regular savings will be 4% from January (currently 3.15%), but it has the normal restictions for these type of accounts af £500 max per month and only for 12 months.

[richlist]

Yes unfortunately that's always the problem with 'to good to be true' accounts....they can be pulled anytime. You need to get in quick to secure an account. Fortunately I got mine a couple of days ago.

[dealtn]

Yes, a naive question and I instinctively know the answer, but why the hell are the fixed term savings rates falling as the UK interest rates increase?

UK term interest rates aren't increasing. Why should (UK Bank and Building Society) fixed term savings rates be increasing?

[pje16]

What makes you think that interest rates on savings accounts are linked to bank base rates ? They arent.

Perhaps you would benefit from looking at regular savings accounts. Lots available.....First Direct paying 7%, Coventry b/soc paying 5% are just two examples.

FDs is only on up to £3,600

[XFool]

What makes you think that interest rates on savings accounts are linked to bank base rates ? They arent.

No? Well, they aren't "linked" but they at least know each other.

Perhaps you would benefit from looking at regular savings accounts. Lots available.....First Direct paying 7%, Coventry b/soc paying 5% are just two examples.

But they aren't yearly rates for lump sums.

[richlist]

What makes you think that interest rates on savings accounts are linked to bank base rates ? They arent.

No? Well, they aren't "linked" but they at least know each other.

Perhaps you would benefit from looking at regular savings accounts. Lots available.....First Direct paying 7%, Coventry b/soc paying 5% are just two examples.

But they aren't yearly rates for lump sums.

The OP didn't indicate he was looking for lump sum savings.
Hopefully my suggestion to look at regular savings accounts hasn't upset you to much.

[kempiejon]

I found mycommunity finance with 4% plus rates for 1 year plus fixed lump sums.
https://www.mycommunityfinance.co.uk/saving-products

[richlist]

What makes you think that interest rates on savings accounts are linked to bank base rates ? They arent.

Perhaps you would benefit from looking at regular savings accounts. Lots available.....First Direct paying 7%, Coventry b/soc paying 5% are just two examples.

FDs is only on up to £3,600

Correct. Some people will be only to happy to build up such a princely sum especially at 7%.
Do you know of any other accounts paying a better rate ?

[XFool]

FDs is only on up to £3,600

Correct. Some people will be only to happy to build up such a princely sum especially at 7%.

Who wouldn't? But it would only be "7%" in the first month! Then 11/12 of 7%, then 10/12 of 7% etc.

[staffordian]

Yes, a naive question and I instinctively know the answer, but why the hell are the fixed term savings rates falling as the UK interest rates increase?

It started when they went to 3%. Now at 3.5%, the rates offered by AJBell and Monzo are lower than they were months ago.

I'm sure that the mortgage and loan rates follow the UK rate increase, so why do they bring down the savings rates?

Bah Humbug!

What the banks need is another Guy Fawkes!

Steve

PS Even if the gunpowder went off, in the average High street, most people probably wouldn't notice a difference!

In the rush to provide various examples of good rates, the original question doesn't seem to have been answered.

I believe it is because the higher long term rates available a while ago were based on the bank rate climbing to a higher figure than is now forecast, so the lower rates available at the moment reflect the new forecasts of a slightly lower bank rate peak.

[AsleepInYorkshire]

In the rush to provide various examples of good rates, the original question doesn't seem to have been answered.

I believe it is because the higher long term rates available a while ago were based on the bank rate climbing to a higher figure than is now forecast, so the lower rates available at the moment reflect the new forecasts of a slightly lower bank rate peak.

Well I'd like to wade in and stay completely "off-topic", but for all the right reasons.

https://savingschampion.co.uk/best-buys

AiY(D)