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Realistbear

Abbey Hike I R For Savers

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http://www.thriftyscot.co.uk/Finance-News/...th-account.html

July 17, 2006
Financial service provider Abbey has launched a new two-year growth bond with a rate of 5.5 per cent gross per year.
According to the company the rate on this bond, which is available until August 8th or until it sells out, is the highest interest rate currently available on the market.

An indicator of higher rates all round coming soon?

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Should comfortably beat most BTL yeilds with zero risk and zero hastle. £100k invested grows to £111 on maturity in 2 years - wonder how those flats will fair with voids, depreciation and maintenance :o

Not to mention the headaches and defaulting tenants. Add more government regulation and fees coming soon and you have the worst of all investments. If that was not bad enough, as the economy weakens and jobs are lost the BTL market will grow increasingly risky.

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Guest mattsta1964

Not to mention the headaches and defaulting tenants. Add more government regulation and fees coming soon and you have the worst of all investments. If that was not bad enough, as the economy weakens and jobs are lost the BTL market will grow increasingly risky.

If the Abbey are trying to attaract savers, that is very good news. I wouldn't be surprised if we see some competition in the market and saving becomes more fasionable again as interest rates start to rise. Surely this is a sign that the Abbey realise rates are going up up up very soon

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Surely this is a sign that the Abbey realise rates are going up up up very soon

Or that they're desperate for savings to meet their deposit requirements in order to lend more...

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The BoE report that came out last week, warning of dangers to the Banking system showed a graph that highlighted the banks exposure to the money markets.

Traditionally the banks lend out money they receive from deposits, the deal is they pay the depositor a decent rate for the privilege of using their money. As we all know the saving rate is rubbish at the moment so the banks have been getting their money from the markets, and the banks have no control over the rate they get ‘charged’. This makes the bank vulnerable to increasing bond rates.

Could this be the first sign of the banks starting to reduce their exposure to market volitility? The flip side to Credit Tightening?

Edited by FTBagain

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An indicator of higher rates all round coming soon?

I think they all ready rising :)

Since the end of April I've been monitoring the FSA savings tables (see http://www.fsa.gov.uk/tables) as part of my rate tarting :D

Taking the conditions;

- an initial deposit of £1000

- regular deposits are made

- the interest is taxable

- any notice period is acceptable

- the account must be available to adults

The average initial rate for the top 1/3rd of accounts on;

- 30th Apr it was 4.8474%

- 17th Jul it is 4.9801%

It's a small step, but its going in the right direction, and maybe by the end of this month the average rate might pass 5%

For those of you that prefer pretty graphs, see;

saving_rate.gif

post-388-1153171696_thumb.jpg

Edited by beerhunter

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  • 301 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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