Waiting for the savings interest rate to rise?

[Cotty]

After months/years of having crap savings rate it finally looks like going the other way.

Are you planning on shifting your savings now or wait a bit to see what they do?

[Petrus1983]

I was about to start a similar thread but doesn’t seem needed now. My bank is offering 0.4% which seems pretty rubbish. Does anyone know a better account - it doesn’t need to be immediate access but 4 weeks would be fine. Also does the amount on deposit affect the rate?

[Harpoon]

MSE is a handy place to look:

https://www.moneysavingexpert.com/savings/savings-...

There's Marcus thread on PH somewhere. Currently pays 1.8%

https://www.marcus.co.uk/uk/en/savings/online-savi...

[sniff diesel]

I’ve got mine split 1/3rds with:
1/3rd in a Virgin money 1 year fixed bond at 3.32%
1/3rd in Chase instant access savings at 1.5%
1/3rd in premium bonds

Gives instant access to some, and a better rate of return on some, plus the dream of “what if” on the PB’s

[Petrus1983]

sniff diesel said:

I’ve got mine split 1/3rds with:
1/3rd in a Virgin money 1 year fixed bond at 3.32%
1/3rd in Chase instant access savings at 1.5%
1/3rd in premium bonds

Gives instant access to some, and a better rate of return on some, plus the dream of “what if” on the PB’s

That’s a great breakdown. Just seen it’s a max of £50k on the premium bonds but still a fun idea.

[Cotty]

Petrus1983 said:

I was about to start a similar thread but doesn’t seem needed now. My bank is offering 0.4% which seems pretty rubbish. Does anyone know a better account - it doesn’t need to be immediate access but 4 weeks would be fine. Also does the amount on deposit affect the rate?

This link suggests the best rates today, but not sure whether to hold of and see what the do next week
https://www.dailymail.co.uk/money/saving/article-1...

[bitchstewie]

Might want to look at a platform like HL Active Savings as if rates move around you can (I think) move your money between accounts via them rather than needing to open and close accounts manually with each institution.

Flagstone is a similar platform but larger minimum amounts required I think.

[skeeterm5]

This is another really useful resource

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

Click through the menu in the left to see current best rates across all sorts of product types.

[davek_964]

I opened a Ford Money account about 6 months ago, and they seem good. Instant access and the interest rate has gone up about 4 or 5 times since I opened it. Currently at 1.95% I think which is ok for instant access.
I do need another though so need to do some research myself

[sniff diesel]

Petrus1983 said:

sniff diesel said:

I’ve got mine split 1/3rds with:
1/3rd in a Virgin money 1 year fixed bond at 3.32%
1/3rd in Chase instant access savings at 1.5%
1/3rd in premium bonds

Gives instant access to some, and a better rate of return on some, plus the dream of “what if” on the PB’s

That’s a great breakdown. Just seen it’s a max of £50k on the premium bonds but still a fun idea.

I’m much more comfortable having my eggs in different baskets. Since I don’t buy lottery tickets PB’s still gives me the chance to dream, average prize rates have just been increased this last week to 2.2% too.

Looking at the current savings rates I could get 2% (2.5% on the first £5k) if I switched to Yorkshire BS, but the 1% cash back on spending with Chase bank pretty much makes up for the difference. I do believe that Chase might well put their savings rate up as it’s been 1.5% since at least March 2022.

Could get a 1 year fixed return at 3.91% with Oxbury bank or 4.33% for a 2 year fix with Smart Save but I’m reluctant to tie my savings up for much longer as I want to be able to pay some off my mortgage when my fixed rate expires.

[anonymous-user]

sniff diesel said:

Could get a 1 year fixed return at 3.91% with Oxbury bank or 4.33% for a 2 year fix with Smart Save but I’m reluctant to tie my savings up for much longer as I want to be able to pay some off my mortgage when my fixed rate expires.

Pretty much where I am as well, I have just fixed my mortgage at 2.84% starting in January and I was going to do the same. The cash is currently in a Marcus account paying 1.8%, but that Oxbury bank 1 year fix is looking pretty tempting.

I am waiting and if rates do go up again in November and saving rates rise I think I will go for a one year fix.

[alscar]

“If “ interest rates go up in November ?
I think the only question is how much by and whether the BOE can / will wait until then.
I wouldn’t fix just yet for savings if you have the luxury of waiting.

[GT4P]

I have instant access savings (no longer available)with Coventry BS and they automatically go up with rate rises , had email today stating rising to 2.25% next month, YBS now do one at 2.5%. So no need to wait just keep switching for best deal

[Jon39]

GT4P said:

I have instant access savings (no longer available) with Coventry BS and they automatically go up with rate rises , had email today stating rising to 2.25% next month, YBS now do one at 2.5%. So no need to wait just keep switching for best deal

For the past 10 years I have not bothered with interest on cash savings. 0 point something percent interest was hardly attractive, compared to dividend yields of 5 or 6 percent.

Now that base rates have at last begun to rise, it makes sense for me now to use savings accounts again, so for simplicity have used the Yorkshire Building Society, which you mention. They don't offer the very top rate, but they are OK. Building societies play a game with customers by offering new accounts, then allow their existing accounts to become uncompetitive. Thanks for your post, because I now see that the 2.5% account you refer to, must have only just been made available. Anyway, easy to switch across.

Of course we must remember that cash is a very poor long-term asset class, guaranteed to lose money. Inflation is the obvious killer.
2% or 3 % interest, when inflation is at 10%, you take my point.

Edited by Jon39 on Thursday 29th September 22:12

[GT4P]

Jon39 said:

Building societies play a game with customers by offering new accounts, then allow their existing accounts to become uncompetitive.

This is the beauty of the CBS one I took out just under 2 years ago it started at 1.10 % (good at the time)fell back a bit but has tracked every rate rise so no need to switch that account at the moment.

[Simpo Two]

Some of the interest rates from the past look very tasty: https://www.bsa.org.uk/BSA/files/5c/5c180498-5e52-...

Roll on 10%+ I say! No more need to play lucky dip on the markets, which is getting rather tiresome TBH.

[The Ferret]

Jon39 said:

Of course we must remember that cash is a very poor long-term asset class, guaranteed to lose money. Inflation is the obvious killer.
2% or 3 % interest, when inflation is at 10%, you take my point.

Edited by Jon39 on Thursday 29th September 22:12

What’s the alternative though?

Stick it in S&S and risk losing xx% in the short term (like we’ve seen this week), and hope it recovers quickly, which is far from guaranteed.

Buy a second property, when interest rates are increasing and the market is looking like it’s slowing down.

There won’t be many making huge gains over the next 12 months against inflation, and if you have any chance of needing cash short term then the alternatives above are potentially a very bad move.

Cash might not perform all that well, but it’s safe haven and 6 month rates at 3% with some PB’s thrown in for the chance of a bigger win seems like a fair shout today. Not sure I’d fix for much longer than that though, and in an ideal world wait until November/December as rates could well have improved by then.

[Jon39]

The Ferret said:

Jon39 said:

Of course we must remember that cash is a very poor long-term asset class, guaranteed to lose money. Inflation is the obvious killer.
2% or 3 % interest, when inflation is at 10%, you take my point.

What’s the alternative though?

Stick it in S&S and risk losing xx% in the short term (like we’ve seen this week), and hope it recovers quickly, which is far from guaranteed.

Buy a second property, when interest rates are increasing and the market is looking like it’s slowing down.

There won’t be many making huge gains over the next 12 months against inflation, and if you have any chance of needing cash short term then the alternatives above are potentially a very bad move.

Cash might not perform all that well, but it’s safe haven and 6 month rates at 3% with some PB’s thrown in for the chance of a bigger win seems like a fair shout today. Not sure I’d fix for much longer than that though, and in an ideal world wait until November/December as rates could well have improved by then.

It all depends on a persons acceptance of risk.

Although equities overall have been a long-term winner historically, if anyone cannot cope with the inevitable volatility, they should not get involved. Not worth losing sleep, worrying about falling share prices. For those who can handle the volatility without worrying (it becomes easier after gaining some practical experience), an occasional market crash can be helpful, because some good businesses become available at much more attractive prices.

Holding some cash is obviously essential to protect against unforseen circumstances, but when people feel safe holding cash, they are mistaken, even though there is no volatility. It is always being ravaged by inflation. Even with lowish levels of inflation, the purchasing power is still gradually being nibbled away. It is fairly rare for savings account interest rates to exceed the level of inflation.

[Simpo Two]

Jon39 said:

...an occasional market crash can be helpful, because some good businesses become available at much more attractive prices.

Holding some cash is obviously essential to protect against unforseen circumstances...

- and for buying all that post-crash stock at much more attractive prices of course.

[Carbon Sasquatch]

Jon39 said:

Of course we must remember that cash is a very poor long-term asset class, guaranteed to lose money. Inflation is the obvious killer.
2% or 3 % interest, when inflation is at 10%, you take my point.

Wasn't it the 2008 GFC that 'broke' interest rates (or rather, the reaction to it) ? I thought prior to that they were roughly in line with inflation, so if a level of normality returns....

Edited by Carbon Sasquatch on Friday 30th September 10:11