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rantnrave

Savings / Current Account Interest Rate Reductions

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BoE shaves a quarter off the base rate last week and news soon follows of cuts being made to mortgage rates. Announcements for savers and / or those with higher interest rate current accounts is much slower though. Anybody know why?

The 0.25% reduction was predicted well in advance and banks have certainly been planning to lower savings rates (rumours of a cut in the rates offered in Santander's 123 account for example). Banks have been trying to squeeze savings rates for years - why the delay now they have an official reason to go ahead??

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They want to do it when we've (hopefully from their point of view) forgotten and can then sneakily decrease the rate when they hope we won't notice??

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There is no connection between saving and borrowing interest rates and BofE base rate.......over the last seven years saving rates and lending rates have plummeted to near zero when the base rate has not moved....why should a 0.25% drop make any difference?

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I've had two letters so far. First direct cash isa interest rate cut and HL sipp interest (slightly differvent I know).

The cash is now going wholesale into a stocks and shares isa. Even if I don't immediately invest it, it feels like the right thing to do. 1% annual is a bad joke. The knowledge I can spread the money out of sterling is incentive enough.

Santander 123 almost certainly will be cut in some manner. I expect them to increase the fee (probably to a tenner a month) and perhaps reduce the max amount from 20k to 10k rather than cut the rate though as it's integral to the 123 concept.

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I`m getting 0.85 from my Nationwide loyalty account as of today.

With my council rent falling at 1% per year plus Aldi prices holding rock solid I`m more than happy.

The big tightening can continue for another few years as far as I`m concerned.

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Some cut rates to savers on August 1st, having sent letters out in mid-July as I think the 0.25 BoE base rate cut was anticipated or advised in advance.

Edited by LiveinHope

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Gone hunting and found that my Coventry Family Saver (closed to new applicants) is down from 1.75% to 1.4%. That's more than the BoE cut... They took it down from 2% at the start of the year too. Grrr.

Edited by rantnrave

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Despite this I have had two letters from Nationwide giving notice of rate cuts in savings accounts. Must have the wrong type of savings with them.

Good on them for keeping some rates.

Can't think of any reason why they may be needing cash though...

Edited by rantnrave

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Maybe because the first to cut will see an exodus of money to those that haven't cut yet. The last to cut has the greatest chance of keeping the money. So it is better to hold out as long as you can and be the last to cut if you can afford it.

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I've been buying more and more gold given the toilet-papering of GBP.

well if you did that just prior to brexit you've made about 25% so far this year.even more if you got in in january(40%)

10% on the metal price,and 15% on the currency debasement.nice.

still interested in a 1% p.a savings account?

Edited by oracle

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Got my notice from Virgin Money today of a 0.25% cut.

Me too, sadly for them I only have £150 in that account (to keep it open in case I ever need to use it). Our main Virgin accounts are cash ISAs, fixed at 1.75% tax free until April 2019.

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Are there still any good long-term fixes out there?.....not open to new customers obviously.....they don't want your money they want your debt...or to buy a property, or risk it in other risky assets......assets that may have a high over the top price but are of little underlying value, money printing just helped pumped it up.... ;)

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well if you did that just prior to brexit you've made about 25% so far this year.even more if you got in in january(40%)

10% on the metal price,and 15% on the currency debasement.nice.

still interested in a 1% p.a savings account?

How about having both plus some other asset classes? Cash for me is enough for the home purchase and 3 years of expenses. Gold is 5% of total portfolio value.

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Are there still any good long-term fixes out there?.....not open to new customers obviously.....they don't want your money they want your debt...or to buy a property, or risk it in other risky assets......assets that may have a high over the top price but are of little underlying value, money printing just helped pumped it up.... ;)

Virgin are still offering a 1.5% cash ISA on a 3 year fix with 120 day loss of interest for early withdrawal.

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Virgin are still offering a 1.5% cash ISA on a 3 year fix with 120 day loss of interest for early withdrawal.

That is more than some mortgages!!! ;)

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Okay, not specifically about rates on savings but had to post this.

Banks reassure customers that no savings will be passed on to them

THE UK’s borrowers and mortgage-holders have been reassured that yesterday’s interest rate cut will not affect their monthly repayments.

Lenders have pledged to compensate for the Bank of England’s potentially destabilising 0.25 per cent cut by keeping their own borrowing rates unchanged and steady.

A spokesman for the British Bankers’ Association said: “British borrowers panicking about how this move will impact household budgets can relax. Everything is staying exactly the same.

“We will not irresponsibly alarm debtors with wild changes to their repayments which leave them confused and burdened with surplus cash.

“Whether you are a householder, a business or weighed down with a large amount of personal debt, rest assured that we will protect you against the financial shock of falling interest rates.

“Quite simply, it’s what we’re here for.”

Homeowner Joanna Kramer said: “If I’d had that extra £22 a month I’d only have spent it, raising retailer confidence and making the coming crash that much worse.

“It’s best the banks keep any extra in their hands. I know we can trust them.

http://www.thedailymash.co.uk/news/business/banks-reassure-customers-that-no-savings-will-be-passed-on-to-them-20160805111862

Edited by spacedin

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I got the notice from Virgin Money this week as well.

Has our super low interest rates now effectively killed the Cash ISA, as scribbling around to get (if lucky) 1% interest means that whether or not its tax free is kind of irrelevant..

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I got the notice from Virgin Money this week as well.

Has our super low interest rates now effectively killed the Cash ISA, as scribbling around to get (if lucky) 1% interest means that whether or not its tax free is kind of irrelevant..

Never had a cash ISA as I don't want to waste the Allowance. Instead I invest all my ISA allowance into Equities and ETF's.

I think of ISA's as a use it or lose once in a lifetime thing. Therefore during the accrual phase of ones life you don't want to be adding and subtracting from it but only building it. Which sort of goes against cash which is more a short term thing (eg house deposit/purchase, emergency fund) as inflation eats it alive so not suitable long periods of wealth storage or for wealth accrual.

I actually take it to an extreme. £200k in cash for a home purchase with none in ISA. £165k in ISA's all of it Equities or ETF's.

Does anyone on HPC actually use Cash ISA's? If yes, would genuinely love to know why as I'm probably missing something given their popularity.

Edit: Pose the correct question.

Edited by wish I could afford one

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