Savings interest rate thread

[AyBee]

Teatowell said:

Ezra said:

Given the option of putting money with Leeds BS at 4.8% or Zopa at 5.08%, I can't fathom why anyone would chose the latter. On a £20k ISA allocation, thats a difference of £56pa. No way does that make up for the extra risk. And, before anyone jumps down my throat, I say that in the full knowledge that FSCS protection covers a Zopa ISA. There's still risk, and 0.28%pa is insufficient reward.

Risk of what exactly, if you know your cash is guaranteed in the event of failure?

Getting the interest.

[Hustle_]

Ezra said:

Given the option of putting money with Leeds BS at 4.8% or Zopa at 5.08%, I can't fathom why anyone would chose the latter.

Maybe if you acquainted yourself with the key features...

Ezra said:

On a £20k ISA allocation, thats a difference of £56pa. No way does that make up for the extra risk. And, before anyone jumps down my throat, I say that in the full knowledge that FSCS protection covers a Zopa ISA. There's still risk, and 0.28%pa is insufficient reward.

You can have more than £20k in an ISA. You have plenty of options if you want a lower interest rate but I prefer the higher ones.

[Teatowell]

AyBee said:

Getting the interest.

Your interest is capitalised at the point of resolution and so unless you’re maxed at the £85k limit you’d receive the full amount of interest due.

[Ezra]

Hustle_ said:

Ezra said:

Given the option of putting money with Leeds BS at 4.8% or Zopa at 5.08%, I can't fathom why anyone would chose the latter.

Maybe if you acquainted yourself with the key features...

Ezra said:

On a £20k ISA allocation, thats a difference of £56pa. No way does that make up for the extra risk. And, before anyone jumps down my throat, I say that in the full knowledge that FSCS protection covers a Zopa ISA. There's still risk, and 0.28%pa is insufficient reward.

You can have more than £20k in an ISA. You have plenty of options if you want a lower interest rate but I prefer the higher ones.

Some folk think they're so smart. I'm aware of the key features, thank you. I'm also aware you can have more than £20k in an ISA. The example I cited was for one annual Isa allowance.

In finance it's sometimes worthwhile not taking everything at face value. Just because an institution is covered by deposit protection scheme does not make putting your cash there risk free. Imagine a scenario where that institution encounters problems...there's a run on deposits and they can't repay everything. You, Mr Know It All, can't get your money when you want/need it. The interest rate on the account goes to 0%, but you still can't get your money back because it's tied up in the admin nightmare of a deposit scheme protection bailout. How long do you think that might last? Could be months. In the meantime, your money is still inaccessible, earning fk all squared. Still think its a good deal?

[Ezra]

the tribester said:

Ezra said:

Given the option of putting money with Leeds BS at 4.8% or Zopa at 5.08%, I can't fathom why anyone would chose the latter. On a £20k ISA allocation, thats a difference of £56pa. No way does that make up for the extra risk. And, before anyone jumps down my throat, I say that in the full knowledge that FSCS protection covers a Zopa ISA. There's still risk, and 0.28%pa is insufficient reward.

What is the risk if FSCS protected, I don't follow.

In finance it's sometimes worthwhile not taking everything at face value. Just because an institution is covered by deposit protection scheme does not make putting your cash there risk free. Imagine a scenario where that institution encounters problems...there's a run on deposits and they can't repay everything. You can't get your money when you want/need it. The interest rate on the account goes to 0%, but you still can't get your money back because it's tied up in the admin nightmare of a deposit scheme protection bailout. How long do you think that might last? Could be months. In the meantime, your money is still inaccessible, earning nothing. Sure, you'll get your money back.....eventually, but I suspect it would all be a bit worrisome. Of course, all this is unlikely, very unlikely. But it's not impossible.

[Hustle_]

[Teatowell]

Ezra said:

Some folk think they're so smart. I'm aware of the key features, thank you. I'm also aware you can have more than £20k in an ISA. The example I cited was for one annual Isa allowance.

In finance it's sometimes worthwhile not taking everything at face value. Just because an institution is covered by deposit protection scheme does not make putting your cash there risk free. Imagine a scenario where that institution encounters problems...there's a run on deposits and they can't repay everything. You, Mr Know It All, can't get your money when you want/need it. The interest rate on the account goes to 0%, but you still can't get your money back because it's tied up in the admin nightmare of a deposit scheme protection bailout. How long do you think that might last? Could be months. In the meantime, your money is still inaccessible, earning fk all squared. Still think its a good deal?

You’re literally describing the event in which FSCS is designed for. Payout in resolution would be within 7 days in all but the most complex of cases. Your ISA absolutely not being one of them. In the event you don’t partake in the run, which would likely be the very cause of failure, you’d be seven days interest richer with all of your cash available.

[Armitage.Shanks]

Just had an investment mature with Zopa. No issues and money transferred immediately after the bond finished. Now it's going to Hodge Bank.

I'll search for the best deal that has FSCS protection including Sharia banking, spreading the load but not over £85k in any. Also when you want monthly interest it can close down your options

Some might say I'm a risk taker by not using a well established high street Bank/Building Society (err like Northern Rock - I had money there on a very good fixed interest bond when it went belly up) but the FSCS assurance is OK with me.

[981Boxess]

Armitage.Shanks said:

Some might say I'm a risk taker by not using a well established high street Bank/Building Society (err like Northern Rock - I had money there on a very good fixed interest bond when it went belly up) but the FSCS assurance is OK with me.

I avoid the sharia options simply because I want to know an exact rate and there are plenty of alternatives, but other than that I see it and do it the same way, not sure how anyone can accuse us of being risk takers with FSCS cover.

Putting money into Icesave pre FSCS days was risk taking.

[spikyone]

Teatowell said:

Ezra said:

Some folk think they're so smart. I'm aware of the key features, thank you. I'm also aware you can have more than £20k in an ISA. The example I cited was for one annual Isa allowance.

In finance it's sometimes worthwhile not taking everything at face value. Just because an institution is covered by deposit protection scheme does not make putting your cash there risk free. Imagine a scenario where that institution encounters problems...there's a run on deposits and they can't repay everything. You, Mr Know It All, can't get your money when you want/need it. The interest rate on the account goes to 0%, but you still can't get your money back because it's tied up in the admin nightmare of a deposit scheme protection bailout. How long do you think that might last? Could be months. In the meantime, your money is still inaccessible, earning fk all squared. Still think its a good deal?

You’re literally describing the event in which FSCS is designed for. Payout in resolution would be within 7 days in all but the most complex of cases. Your ISA absolutely not being one of them. In the event you don’t partake in the run, which would likely be the very cause of failure, you’d be seven days interest richer with all of your cash available.

Ezra is being a bit daft, I've yet to see any reason given as to why Zopa might be considered a risk. If it's just "I've never heard of them", then I'll point the gentleman towards the post just above this one on Northern Rock. They've been around for almost 20 years so it's not as though they're some company that's only just popped up.

[Puzzles]

Anyone used plum?

One of my friends said the app is good and it’s easy to set up.

He is getting 5%+ on his isa.

[Tommy1000]

Indeed, well put.

I don't know anyone (including the most cautious of investors or "savers") who wouldn't be prepared to use Zopa for "risk" reasons.

Teatowell said:

You’re literally describing the event in which FSCS is designed for. Payout in resolution would be within 7 days in all but the most complex of cases. Your ISA absolutely not being one of them. In the event you don’t partake in the run, which would likely be the very cause of failure, you’d be seven days interest richer with all of your cash available.

[Armitage.Shanks]

British Savings Bonds announced today with NS&I. 4.15% fixed 3yrs if you want 100% security up to £1M backed by HM Treasury.

[OldSkoolRS]

Armitage.Shanks said:

British Savings Bonds announced today with NS&I. 4.15% fixed 3yrs if you want 100% security up to £1M backed by HM Treasury.

Apart from the whole 'risk' thing discussed above, the rate isn't particularly competitive though? The current top 5 on Savingschampion 3 year fixed bonds go from 4.66% to 4.71% which over 3 years could add up to a reasonably amount.

I'm close to breaching my starter savings rate this tax year, so I've moved some matured savings bonds to ISA, but I've had some great rates over the past year or so thanks mostly to this thread/Savingschampion.

[981Boxess]

Armitage.Shanks said:

British Savings Bonds announced today with NS&I. 4.15% fixed 3yrs if you want 100% security up to £1M backed by HM Treasury.

Bulletproof agreed - but I would rather open myself up to some potential FSCS protected admin hassle (in the unlikely event of needing it) and get a better rate.

IMO if you are going to go through the hassle of opening up untold accounts you might as well get as much as you can for doing it.

[Armitage.Shanks]

OldSkoolRS said:

I've had some great rates over the past year or so thanks mostly to this thread/Savingschampion.

Agree as I've found a few options on here that didn't show through Martin Lewis et al. I nailed the NS&I 1yr fix at 6.2% last year

[981Boxess]

Armitage.Shanks said:

OldSkoolRS said:

I've had some great rates over the past year or so thanks mostly to this thread/Savingschampion.

Agree as I've found a few options on here that didn't show through Martin Lewis et al. I nailed the NS&I 1yr fix at 6.2% last year

This thread has been really useful on the way up and I am sure it will be on the way down, two heads are better than one, three heads etc

[Max5476]

Currently looking at a new instant access cash ISA, as I'll likely start paying tax on interest this year, looking at the Chip Cash ISA, which is a variable tracker, currently at 5.1%, does that look like a good deal?

I'm aware the base rate is likely to to down, but is there also a risk that Chip will vary their tracking to drop further from the base rate?

I'm also not sure how I sit on the open banking access needed.

Anyone with thoughts or experience?

[MajorMantra]

Max5476 said:

Currently looking at a new instant access cash ISA, as I'll likely start paying tax on interest this year, looking at the Chip Cash ISA, which is a variable tracker, currently at 5.1%, does that look like a good deal?

I'm aware the base rate is likely to to down, but is there also a risk that Chip will vary their tracking to drop further from the base rate?

I'm also not sure how I sit on the open banking access needed.

Anyone with thoughts or experience?

I've had a Chip saver for a while and it's been fine. No issues with the open banking, other than slight flakiness with the app (Android) where I get a blank screen at the final stage of making payments. It's always worked though.

I also recently opened the ISA as it's a competitive rate. Only downside is no transfers in, so not one for consolidating past years' accounts.

[Zoon]

MajorMantra said:

I also recently opened the ISA as it's a competitive rate. Only downside is no transfers in, so not one for consolidating past years' accounts.

They are adding transfers in shortly however.