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Private Banks Trying To Force Depositors Into "non-Cash" Investments?

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Word has come round to me that a number of private banks, known for their wealthy clientèle, are slashing interest rates on their savings accounts.

Typical rates on cash savings are now:

balance < £100k: AER = 0.00%

balance £100k-£10 million: AER = 0.5%

balance >£10m: AER = 0.00%

The latest rates sheets come with begging letters, bemoaning persistent monetary easing, likelihood of more QE further depressing returns on cash, rising and persistently high inflation, ... and perhaps, you'd better have a word with your manager about a more suitable investment.

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Word has come round to me that a number of private banks, known for their wealthy clientèle, are slashing interest rates on their savings accounts.

Typical rates on cash savings are now:

balance < £100k: AER = 0.00%

balance £100k-£10 million: AER = 0.5%

balance >£10m: AER = 0.00%

The latest rates sheets come with begging letters, bemoaning persistent monetary easing, likelihood of more QE further depressing returns on cash, rising and persistently high inflation, ... and perhaps, you'd better have a word with your manager about a more suitable investment.

I suppose that is the good news..

HSBC is sending out letters charging business account for £5.50 a month (£66) (previously free on electronic transaction account)

Those private banks make their money from selling 'wealth management' product with good frees anyway...so they are just doing what they have always been doing. If they run out of opportunities, they could raise their mortgage rates by 1% though, not sure if those 'clients' with million pound mortgage will be able to escape that easily.

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HSBC is sending out letters charging business account for £5.50 a month (£66) (previously free on electronic transaction account)

Yeah going to be some accounts closed through that - one here anyway!

Edited by SarahBell

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Word has come round to me that a number of private banks, known for their wealthy clientèle, are slashing interest rates on their savings accounts.

Typical rates on cash savings are now:

balance < £100k: AER = 0.00%

balance £100k-£10 million: AER = 0.5%

balance >£10m: AER = 0.00%

The latest rates sheets come with begging letters, bemoaning persistent monetary easing, likelihood of more QE further depressing returns on cash, rising and persistently high inflation, ... and perhaps, you'd better have a word with your manager about a more suitable investment.

Problem is there is too much cash in the system at present. The wealth managers traditionally used cash on deposit to place a money market deposit with a real bank. Alternatively lend to customers who want to trade on margin. Unfortunately the big banks do not want money from the wealth firms that will disappear in the blink of an eye. The FLS also means that they can borrow very cheaply.

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Problem is there is too much cash in the system at present. The wealth managers traditionally used cash on deposit to place a money market deposit with a real bank. Alternatively lend to customers who want to trade on margin. Unfortunately the big banks do not want money from the wealth firms that will disappear in the blink of an eye. The FLS also means that they can borrow very cheaply.

Banks dont want cash?

Yet QE and other bailouts was to ease "liquidity".

So if they are awash, they dont need any more help...or FLS....or anything else.....

WTF IS going on in reality?

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Word has come round to me that a number of private banks, known for their wealthy clientèle, are slashing interest rates on their savings accounts.

Wealthy *and* gullible. The sort of people who happily invested in AIG shortly before it went a bit green around the gills because some salesman phoned them to say it was an unmissable opportunity. Except he wanted to give it a miss himself and the bank didn't want to be long either. Admittedly, some very smart people got caught up in that particular stinker as well: http://www.nytimes.c...all&oref=slogin

Anyone who deposits uninsured money in a bank for a non-trivial period of time is not risk averse. It is actually sane advice to suggest safe alternatives such as short-term government paper. But that is probably not quite what the salesmen are pushing.

Maybe I am just unlucky, but whenever I come across someone who wants to help me manage my wealth, they turn out to be an expensively dressed chancer with no ability to do anything that anyone capable of comprehending A-level maths could not do for themselves. I am not wealthy, just one of the "mass affluent". Whether or not that is a term of derision, I somehow suspect that the really wealthy don't have much better luck. In particular, a wealthy institution I am familiar with that has a large investment pot is a bit down on its luck when it comes to avoiding slick promises of yield that don't quite materialise. So why would individuals who on the average probably have even less investment experience be doing any better.

Anyone know a safe (i.e. not subject to the risk that the politicians and central bankers cause the sort of wealth destruction previously known only in warzones and the 3rd world) asset I could invest in? Thought so.

Edited by MongerOfDoom

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Yeah going to be some accounts closed through that - one here anyway!

Or you could take the view that its perhaps safer to keep your cash in a bank that has some concrete revenue streams outside the financial markets.

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Anyone know a safe (i.e. not subject to the risk that the politicians and central bankers cause the sort of wealth destruction previously known only in warzones and the 3rd world) asset I could invest in? Thought so.

Yes, but we have to agree the fees first.

seriously - investing in yourself would be the one safe thing.

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The thing with others investing your hard earned cash for you is they take their fee whether they make you money or lose your money......fine if they only charge a percentage of anything they make, nothing if their poor investment advice sees to it you end up with less than you started with.....inflation has already stolen its bit, that is enough of a penalty for anyone to take. ;)

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Anyone know a safe (i.e. not subject to the risk that the politicians and central bankers cause the sort of wealth destruction previously known only in warzones and the 3rd world) asset I could invest in? Thought so.

If there is, its probably illegal. Government doesnt allow you to 'opt out'

Thats their interpretation of freedom. Either you participate in their sick version of society, or you are a criminal who must be persecuted.

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  • 246 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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