Why the rush?

[Greenmantle]

Many years ago I leant that the amount of cash being squirreled away by ordinary savers was only a drop in the ocean compared to the amount of cash slopping around in the world of finance.

So why has there been an almost daily race this last month to top the leader board of best rates for say fixed rate bonds 1-5yrs.

A week or so ago Nationwide released 1,2 & 3yr bonds toppling everyone else off the leader board. Surely its not a cashflow issue?

[trickywoo]

Part of it will be them thinking rates are going up so if they can lock punters in now they make more money over the course of the fix they offer.

[Ashfordian]

Greenmantle said:

Many years ago I leant that the amount of cash being squirreled away by ordinary savers was only a drop in the ocean compared to the amount of cash slopping around in the world of finance.

So why has there been an almost daily race this last month to top the leader board of best rates for say fixed rate bonds 1-5yrs.

A week or so ago Nationwide released 1,2 & 3yr bonds toppling everyone else off the leader board. Surely its not a cashflow issue?

It is now cheaper and a more stable source to go down this route to get money in so they can lend it out, than it is to go to the markets.

[Greenmantle]

Ashfordian said:

Greenmantle said:

Many years ago I leant that the amount of cash being squirreled away by ordinary savers was only a drop in the ocean compared to the amount of cash slopping around in the world of finance.

So why has there been an almost daily race this last month to top the leader board of best rates for say fixed rate bonds 1-5yrs.

A week or so ago Nationwide released 1,2 & 3yr bonds toppling everyone else off the leader board. Surely its not a cashflow issue?

It is now cheaper and a more stable source to go down this route to get money in so they can lend it out, than it is to go to the markets.

So why isnt NS&I doing this? Like Tescos "Every Little Helps!"

[Ashfordian]

Greenmantle said:

So why isnt NS&I doing this? Like Tescos "Every Little Helps!"

No idea on the NS&I. All I know is my NS&I certs are index linked.

Taking a guess on it though, I would suggest there is not the motivation of profit at the NS&I

[OutInTheShed]

I'd imagine that lenders are as keen as everyone else to lock in to fixed rates to match the fixed rates they've lent out.
It's the cheapest and simplest de-risk.

It's also good advertising, being near the top of a search makes you look good, even if it's not the product I'm after.
Being seen as slow to raise rates for savers is bad PR.

Possibly the markets are wanting higher margins to lend to some lenders as they see the housing market turning and the risk of defaults rising.
Not having to beg the market for funds is always a better image.

[Greenmantle]

Ashfordian said:

Greenmantle said:

So why isnt NS&I doing this? Like Tescos "Every Little Helps!"

No idea on the NS&I. All I know is my NS&I certs are index linked.

Taking a guess on it though, I would suggest there is not the motivation of profit at the NS&I

jeez - with the state of the countries financial affairs I would have thought the new chancellor would be in full "Show Me The Money" mode.

[Ashfordian]

Greenmantle said:

Ashfordian said:

Greenmantle said:

So why isnt NS&I doing this? Like Tescos "Every Little Helps!"

No idea on the NS&I. All I know is my NS&I certs are index linked.

Taking a guess on it though, I would suggest there is not the motivation of profit at the NS&I

jeez - with the state of the countries financial affairs I would have thought the new chancellor would be in full "Show Me The Money" mode.

I see where you are coming from but I suspect the difference it would make would be less than a rounding error on what the chancellor is looking at.