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JonoP

My Savings Are Doing Nothing In The Bank

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I am constantly hearing EAs trot out the line about people who have decided to buy ‘because their savings are doing nothing in the bank’. The EAs say things like ‘with interest rates at 0.5%, people have decided that property may offer a better return for their money’

This annoys the hell out of me. A cursory glance through any newspaper shows that I can get a one year fixed rate bond that pays approx 4.3%. This is way above the average net yield on BTL (approx 3% for houses bought in the last few years) and it comes with zero downside risk to capital. On top of this, the best available rate I have seen in the last 6 years was 6.71% at Northern Rock – so current savings rates have only dropped by about one third from the top of the market.

Grrrrrrr

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I am constantly hearing EAs trot out the line about people who have decided to buy ‘because their savings are doing nothing in the bank’. The EAs say things like ‘with interest rates at 0.5%, people have decided that property may offer a better return for their money’

This annoys the hell out of me. A cursory glance through any newspaper shows that I can get a one year fixed rate bond that pays approx 4.3%. This is way above the average net yield on BTL (approx 3% for houses bought in the last few years) and it comes with zero downside risk to capital. On top of this, the best available rate I have seen in the last 6 years was 6.71% at Northern Rock �" so current savings rates have only dropped by about one third from the top of the market.

Grrrrrrr

It's a bit of a self fulfilling prophecy either way.

Everyone believes we've hit bottom and goes for the BTL with (long term) index linked income with (long term) capital protection and prices don't fall any further.

Everyone believes there's further to fall and puts their capital into a one year fixed rate bond and waits and prices do fall further.

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Guest pioneer31

I don't know why more people don't go for fixed rate bonds.......I mean who (of sane mind) wants to access their deposit fund in the next 12 months?

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I don't know why more people don't go for fixed rate bonds.......I mean who (of sane mind) wants to access their deposit fund in the next 12 months?

With equities as low as they are.....

me.

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My fixed rate ended in May. I don't have a clue where to put my money now. I was with Abbey but their 3.?% fixed rate bond online only applies to knew customers. I also don't know when I'm going to need this cash and just wished there were decent 6 month bonds to look at.

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No risk?

Tieing your £'s up for 12 months? Think again.............

There is a lot of sense in buying property right now, particularly if you are going to leverage yourself to do it. It all depends on how you read the future.

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My primary reason for saving money has never been to earn interest. The reason has always been to build up a cash reserve. Interest is just icing on the cake.

There is a lot of sense in buying property right now, particularly if you are going to leverage yourself to do it. It all depends on how you read the future.
....for one thing, interest rates are only likely to go up from where they are now. Edited by blankster

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No risk?

Tieing your £'s up for 12 months? Think again.............

There is a lot of sense in buying property right now, particularly if you are going to leverage yourself to do it. It all depends on how you read the future.

Sadly, I agree with you. What a terrible state of affairs it is where people feel that they need to spend their savings on a depreciating asset, as it is the least bad scenario.

How did we get in this mess, and why aren't those responsible being punished?

Utterly, utterly deplorable.

EDIT: Fat fingers.

Edited by twatmangle

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This annoys the hell out of me. A cursory glance through any newspaper shows that I can get a one year fixed rate bond that pays approx 4.3%.

who is that with if you dont mind me asking :unsure:

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Sadly, I agree with you. What a terrible state of affairs it is where people feel that they need to spend their savings on a depreciating asset, as it is the least bad scenario.

How did we get in this mess, and why aren't those responsible being punished?

Utterly, utterly deplorable.

EDIT: Fat fingers.

Yep, utterly deplorable. I have never been so angry in my life towards a government.

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No risk?

Tieing your £'s up for 12 months? Think again.............

There is a lot of sense in buying property right now, particularly if you are going to leverage yourself to do it. It all depends on how you read the future.

Yeah, inflation is a risk, but I do not think that it is so bad over a 12 month timeframe. Would not go for a 2 year bond, but happy with one year bonds.

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Guest มร หล&#3
Yep, utterly deplorable. I have never been so angry in my life towards a government.

Godley,

Gordon's woolly hat isn't on straight.

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Yeah, inflation is a risk, but I do not think that it is so bad over a 12 month timeframe. Would not go for a 2 year bond, but happy with one year bonds.

And what about interest rates on the mortgage?

Today money is cheap, 12 months from now when you come to get your mortgage? It would wipe out anything you made on your savings and then some.

Fix rate deal and then let inflation work it's 'magic' on your debt.

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Used your ISA allowance yet? Northern Rock doing 3% 1 yr FR bond - on their latest issue. Transfers accepted. Did one today in branch.

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Godley,

Gordon's woolly hat isn't on straight.

My boy's asked me the other day, 'why has that man got a slug on his head?' :lol:

It was my best effort!!!!! :P

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Guest มร หล&#3
My boy's asked me the other day, 'why has that man got a slug on his head?' :lol:

It was my best effort!!!!! :P

Oh geezus! I thought that bit at the end was a bobble not a . . . . :o

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[....for one thing, interest rates are only likely to go up from where they are now.

Which is just one of the reason's buying now makes sense. If you are LEVERAGING yourself to do it.

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i think you have to look longer term, interest rates will go up sometime.

so many people here are reactionery to the current situation.

same sort of people that heard about BTL and then HAD TO HAVE ONE I GUESS.

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It's a bit of a self fulfilling prophecy either way.

Everyone believes we've hit bottom and goes for the BTL with (long term) index linked income with (long term) capital protection and prices don't fall any further.

Everyone believes there's further to fall and puts their capital into a one year fixed rate bond and waits and prices do fall further.

err, no, because houses are overvalued and the housing market has a lot more than just BTLrs like yourself

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I am constantly hearing EAs trot out the line about people who have decided to buy ‘because their savings are doing nothing in the bank’. The EAs say things like ‘with interest rates at 0.5%, people have decided that property may offer a better return for their money’

This annoys the hell out of me. A cursory glance through any newspaper shows that I can get a one year fixed rate bond that pays approx 4.3%. This is way above the average net yield on BTL (approx 3% for houses bought in the last few years) and it comes with zero downside risk to capital. On top of this, the best available rate I have seen in the last 6 years was 6.71% at Northern Rock – so current savings rates have only dropped by about one third from the top of the market.

Grrrrrrr

Do you remember where you saw the 4.3 rate? I can;t find above a 3.75 rate on a 12 month fixed. The last of my 7% accounts is coming to an end in a week so need to find something else.

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I am constantly hearing EAs trot out the line about people who have decided to buy ‘because their savings are doing nothing in the bank’. The EAs say things like ‘with interest rates at 0.5%, people have decided that property may offer a better return for their money’

This annoys the hell out of me. A cursory glance through any newspaper shows that I can get a one year fixed rate bond that pays approx 4.3%. This is way above the average net yield on BTL (approx 3% for houses bought in the last few years) and it comes with zero downside risk to capital. On top of this, the best available rate I have seen in the last 6 years was 6.71% at Northern Rock – so current savings rates have only dropped by about one third from the top of the market.

Grrrrrrr

Boring.

You just dont fancy property. You will probably never own one.

Fine

Move on please

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No risk?

Tieing your £'s up for 12 months? Think again.............

There is a lot of sense in buying property right now, particularly if you are going to leverage yourself to do it. It all depends on how you read the future.

It's not really tied up though is it.

You can take your money out whenever you want you'll just not get the interest.

I'll take my chances in a 12 month fixed rather buying now and leveraging myself in the hope hyperinflation will occur.

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Do you remember where you saw the 4.3 rate? I can;t find above a 3.75 rate on a 12 month fixed. The last of my 7% accounts is coming to an end in a week so need to find something else.

Hmm, I think I may be mistaken. Cannot find any 4%+ deals online. Was sure I saw a couple in the paper at the weekend but in hindsight 3.85% looks to be the best one year fix. Apologies. Lots of deals for 4.3%+ over two years are available.

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Boring.

You just dont fancy property. You will probably never own one.

Fine

Move on please

Yeah I will, I just will get a better deal than you did/will whatever.

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