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We were all supposed to go out and spend since we were getting such a poor return on our savings but the opposite has happened and people are spending less and hanging on to their savings even though the amount of interest received is pathetic.

The law of unintended consequences strikes again. Ha ha to TPTB :D

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Santander 123 accounts pay 3% up to £20k and interest is about to become tax-free too. Yes, there's a £5 monthly fee, but cashback on utility bills can offset most of that. A couple can have one each and a joint account on top of that. Santander's Help to Buy ISA pays 4% annually too - even if you don't ultimately wait for the bonus to buy a house.

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When banks are desperate, don't they offer high interest rates to try get funds in not low? (Think Iceland etc) With Funding for Lending quietly being extended for another 2 years what do they need savers for? They are a liability in a NIRP world.

The banks don't need funds from deposits. The create loans out of thin air legally and all our deposits are liabilities. Paying less money to the plebs on their deposits means better spreads?

Problem is they act like a cartel. 1.45% is probably a good deal LOL ... at that level of return I would be tempted to just keep it in cash in a safe box under the bed

Bank of England policy paper May 2015:

"Depositors who deposit their money with a bank are therefore no longer the legal owners of this money, but rather they are one of the general creditors of the bank"

Looking at the quote from the BOE in 2015 you might not have a bad idea.

Zero Hedge:

The truth is that if society panics and there is a full blown rush out of existing electronic bank deposits and into physical currency to avoid negative rate taxation, only those who panic first will be safe.

Why? Because of the "magic" of fractional reserve banking - there is simply not enough physical currency in circulation to satisfy all savers' claims.

http://www.zerohedge.com/news/2016-02-27/global-run-physical-cash-has-begun-why-it-pays-panic-first

Edited by Assume The Opposite
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Santander 123 accounts pay 3% up to £20k and interest is about to become tax-free too. Yes, there's a £5 monthly fee, but cashback on utility bills can offset most of that. A couple can have one each and a joint account on top of that. Santander's Help to Buy ISA pays 4% annually too - even if you don't ultimately wait for the bonus to buy a house.

I had last week off and have just opened 3 of these. The requirement for the £500 credit is easy - I just pay 3 £500 amounts from my Club Lloyds (paying 4% on £5k) - then each of the Santander accounts pays the £500 x 3 back into another Club Lloyds which in-turn bounces back to the first account.

The thing that is most difficult is having 2 DDs on each account and ensuring the Santander ones get the best ones for cash back. For me its 10 DDs just on these accounts. Easy to do but if one of these banks drops its rates in the future it could mean lots of fiddling around.

Worth it though....£2200 a year interest on £70k.....more than double what I was getting. Vue Cinema tickets on Club Lloyds are a nice touch for us.

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  • 5 weeks later...

I received a letter from Nationwide. They are trying to bounce me out of my current Flex account and into their Flexplus account.

Flex pays 0% interest with 0% charges when in credit, plus some travel insurance for the family.

Flexplus pays 2.96% on balances up to £2500 and nowt above that but charges £10 a month regardless. This is actually a negative interest rate because the most interest you can 'earn' is £74pa but you pay out £120pa. Or -1.84% interest.

If you have less than £2500, say £1000, the interest is -9.04%.

If you have say £5000, the interest is -0.92%

If you have £75000, the interest is still negative at -0.06%

Oh, and the '2.96% interest' is still taxable at 20%!

Methinks they are taking the P1ss!

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I received a letter from Nationwide. They are trying to bounce me out of my current Flex account and into their Flexplus account.

Flex pays 0% interest with 0% charges when in credit, plus some travel insurance for the family.

Flexplus pays 2.96% on balances up to £2500 and nowt above that but charges £10 a month regardless. This is actually a negative interest rate because the most interest you can 'earn' is £74pa but you pay out £120pa. Or -1.84% interest.

If you have less than £2500, say £1000, the interest is -9.04%.

If you have say £5000, the interest is -0.92%

If you have £75000, the interest is still negative at -0.06%

Oh, and the '2.96% interest' is still taxable at 20%!

Methinks they are taking the P1ss!

You mean they're not keeping you safe? I just can't understand this. I thought they cared.

Just closed an account with NW. Can't stand them.

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  • 3 months later...
  • 4 weeks later...

Got the same letter. Gutted as it was the fourth "full" account I filled following the FSCS limit changes. Time to look at generators, fuel and barbedwire as investments methinks.

Barclays Everyday Saver (easy access savings) rates are being lowered from 0.25% to an even more pathetic 0.05% starting December.

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Sitting on a pile of cash it used to be worth getting a 0% credit card every time I had to buy something expensive so I could repay it full 12-18 months later and have the cash working for me during that time on 5% something savings account. Nowadays it makes more sense to use my Nwide 0.5% cashback credit card rather than going through the effort of applying for a 0% card... really strange.

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Sitting on a pile of cash it used to be worth getting a 0% credit card every time I had to buy something expensive so I could repay it full 12-18 months later and have the cash working for me during that time on 5% something savings account. Nowadays it makes more sense to use my Nwide 0.5% cashback credit card rather than going through the effort of applying for a 0% card... really strange.

Same here, 0.5% cashback on all spending.

I wouldn't be surprised if all cashback schemes were to disappear soon.

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  • 3 weeks later...

Just got a letter from Lloyds detailing their revised post rate cut interest rates for savings accounts and cash ISAs and we are now down from 0.25% p/a to 0.05% p/a gross.

FFS why not call it 0% and be done with it.

In other terms, Joe asks Fred, can I borrow 100 quid and give you back the 100 quid plus 5 pence next year.

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1 hour ago, ChewingGrass said:

Just got a letter from Lloyds detailing their revised post rate cut interest rates for savings accounts and cash ISAs and we are now down from 0.25% p/a to 0.05% p/a gross.

FFS why not call it 0% and be done with it.

In other terms, Joe asks Fred, can I borrow 100 quid and give you back the 100 quid plus 5 pence next year.

Ring them and they can nudge the rates to a better account. Not much in it but may as well be in your pocket if it's a simple call or online click. 

5p ??

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  • 1 month later...
  • 2 months later...

Things are looking (a little) up. Tesco doesn't require DD to work and can open up to 2.  I know recent security issues and all that but decided to go for it anyway.

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#currentaccount

Savings via your bank account

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  • 3 weeks later...

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