Low interest rates on savings
- Thread starter AnnO'Neemus
- Start date
Supine
Newt Member
So the money I put into an ISA two years ago is now worth less than it was then.
Fucking typical, Capitalism stops doing the one thing it could be relied on doing as soon as I get involved.
Don’t be silly. The bank still used your capital to make themselves money. They just didn’t share it with you!
kabbes
First intersubjective, then internalised
I 100% know how you feel but assess it in another 8 years and see how it is then…So the money I put into an ISA two years ago is now worth less than it was then.
Fucking typical, Capitalism stops doing the one thing it could be relied on doing as soon as I get involved.
When it's too late.
This last month I have completely stopped looking at my investments after many months of checking several times a day. It was making me feel a bit depressed.
editor
hiraethified
Premium Bonds can be worth a punt as you can be in with a good chance of winning something ever so often.
www.nsandi.com
Premium Bonds
Buy Premium Bonds for yourself or a child under 16: easy access and a chance to win tax-free prizes in our monthly prize draw. Visit our site for more details.
www.nsandi.com
platinumsage
HaveMyPassword123
Normally you’d be better off putting your money in a standard savings account which has a higher rate of interest than offered on the premium bonds, and then using some of the extra interest to buy a lottery ticket every so often. That way you’ll have the higher interest rate, the same chance of big winnings, and zero chance of earning less interest than the published rate.
Which isn’t true.
I don't know the rates offered now, but fairly recently they were pretty good and they gave the added bonus of being "instant" access.
The full range of options that many people don’t or can’t take advantage of.
Yeah but people want to feel they're in with a chance (however miniscule) of winning some money and changing their lives. That's why I've got some anyway.
nick
Pleomorphic Adenomas R us
Suspect Kabbes is playing this conversation with the benefit of home advantage
They are relatively liquid but give a low rate of return.
There is the added frisson of excitement when you get the email at the start of every month.
A place to put rainy day money that is out of sight so not as easily touched as that savings account that you can spend with a tap on your phone app.
I'll bet 1000 to 1 that no one here will ever get a higher band prize.
But they are better than lottery tickets
Full disclosure. I have premium bonds and buy lottery tickets
They are relatively liquid but give a low rate of return.
There is the added frisson of excitement when you get the email at the start of every month.
A place to put rainy day money that is out of sight so not as easily touched as that savings account that you can spend with a tap on your phone app.
I'll bet 1000 to 1 that no one here will ever get a higher band prize.
But they are better than lottery tickets
Full disclosure. I have premium bonds and buy lottery tickets
kabbes
First intersubjective, then internalised
As platinumsage says, there are better ways to achieve that.Yeah but people want to feel they're in with a chance (however miniscule) of winning some money and changing their lives. That's why I've got some anyway.
Look, people don’t act rationally with respect to savings any more than with respect to anything else in life. That’s fine, people should do as they see fit. But when I see people advising other people to do things, that’s when it’s worth me pointing out that the advice is not necessarily good advice.
platinumsage
HaveMyPassword123
No they aren't.
£1000 in premium bonds gives you 1 in 4,901,927 of winning a million over the course of a year. Meanwhile there's a 70% chance of getting nothing at all.
£1000 in a 1.5% savings account gives you £15 interest. Buy one Euromillion HotPicks Match 5 ticket @ £1.50, and that gives you a 1 in 2,118,760 of winning a million, and you have £13.50 left over.
Repeat for various amounts and combinations of different types of lottery tickets and prizes, and there is no rational justification for buying Premium Bonds in an attempt to win big prizes.
You aren’t giving any advice and you are wrong on premium bonds offering no discernible useful function on any risk-reward axis.
All in all the typical bad advice I would expect from anyone involved in financial advice.
nick
Pleomorphic Adenomas R us
Don't forget you get your stake back with premium bonds (eroded by inflation) - but yes. you're right and I'm wrong, on the relative merits. Although I think we agree that they are both "sub-optimal"
nick
Pleomorphic Adenomas R us
you're doing well. On the back of a fag packet I've made 0.6% annualised in the last 7 months (prizes not reinvested)
And also, roughly 0.6% over the last 12 months (some prizes reinvested)
Anyway - triple rollover tonight - so back in a minute whilst I ticket up
Edit to add - although my premium bonds have been my best performing asset class over the last 5 months - as everything else from fund Isa's, diversified SIPPs and crypto - has tanked since xmas. Next best performing is probably the envelope of cash I have secreted about the house
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strung out
💩 🤣 🍆 💦 🧐 👻 🐝 🐈⬛
There might be some edge case scenarios (and definitely have been for a period until relatively recently when the interest rates were much worse), where you needed the money to be easily accessible and Premium Bonds have been the best option. This was usually true for people earning more than £150,000 per year, for whom all savings account interest was taxed, unlike Premium Bond winnings, which are tax free. Other scenarios might be when you've filled various high earning accounts up to their limit, [e.g. the Chase account which only pays interest up to £250,000 of savings], but still have more to invest.
You're correct that it's not really the case now though, with 1.5% savings accounts available. Especially for 'normal' savers.
Riklet
procrastinación
The best investment ive ever made (aside from buying a house, which doesn't count) is starting to pay in to a private pension. I have an ethical one with Royal London which has done v well in the past few years especially. In fact it has outperformed "conventional" pensions significantly. Green capitalist bullshit indeed, I know.
Been getting government top up from the £1500 I pay into it a year, £125 a month. 25% top up in fact. So after about 9 years of paying in its now worth about 31k compared to the miserable ~15k aprox it would be worth if id put it in a cash ISA or maybe less if I'd tried to play the stockmarket without knowing what Im doing.
Sure this is a long term investment for a good 20+ years in the future but def worth considering and looking into if youre not benefiting from the tax relief already via work pension etc. I was working abroad so I wasnt.
Oh I had a few grand in premium bonds too and I won £1100 one month. Who wants to frickin touch me??
Been getting government top up from the £1500 I pay into it a year, £125 a month. 25% top up in fact. So after about 9 years of paying in its now worth about 31k compared to the miserable ~15k aprox it would be worth if id put it in a cash ISA or maybe less if I'd tried to play the stockmarket without knowing what Im doing.
Sure this is a long term investment for a good 20+ years in the future but def worth considering and looking into if youre not benefiting from the tax relief already via work pension etc. I was working abroad so I wasnt.
Oh I had a few grand in premium bonds too and I won £1100 one month. Who wants to frickin touch me??
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pseudonarcissus
fluttering and dancing
And if you are working abroad, the voluntary national insurance contributions to get you up to full house (35 years) for a state pension is pretty good value. (About £12/mo)
Riklet
procrastinación
this is good info and something I never did in 8 years but keen meaning to look into. Can it be paid retrospectively? I would have to work for another 10 years in Spain minimum to qualify for any pension there...
pseudonarcissus
fluttering and dancing
I think, if you’re in the EU, the years contributing to the EU pension count.
I think you can back-fill years, maybe the last 5 years.
They are very helpful if you can get through to them on the phone (it means being first in the queue at 09h…05h here).
If you have a government gateway account you can look at record. I found a couple of years didn’t count as direct debits must have fucked up.
CH1
"Red Guard"(NLYL)
Can't resist responding to this one.
"The best investment I ever made" was Petroleos Mexicanos 2006 14.5% - a quasi gilt issued by Lloyds Bank on behalf of the Government of Mexico around 1981 when Mexico was going bust.
I was coming up to my redundancy at RS Components in City Road and used to pop into the old Throgmorton Street stock exchange and go to the viewing gallery for my lunch break sometimes. It was all yellow buttons and blue buttons on the (physical) traders back then. No screens - and stock prices came out to the gallery on a teleprinter and also various dot-matrix displays.
I had noted for a while that Pemex and also United Mexican States 16.5% 2008 were yielding high - like 21% taking intro account the purchase price. In those days I banked with Williams & Glynns in Lombard Street - the first major bank to offer free current account banking. They had frock coated doormen too. You could pop upstairs to the securities department and literally buy stocks and shares over the counter (via the bank's brokers).
I went up to the counter when I had a quote for my redundancy package and asked one of the rather staid old guys on the securities counter what he thought of Petroleos Mexicanos. "Wouldn't touch it with a barge pole" he said. "Oh yes, what would you recommend then - for income?" "You know we are not allowed to recommend stocks - unless you have a discretionary account" "But...." "Well he said if you want yield go for a spread of securities, starting with Imperial Tobacco"
That did it - I decided on a flutter and bought £1,000 of Pemex for the price of £725 plus £11.50 dealing costs.
Pemex never let me down - I got £72.50 interest every six months until the bond was redeemed in full in 2006 all the way from 1983 to 2006. A running yield of 19.68% beat that!
PS in case I'm giving the compression of total recklessness I used the bulk of my redundancy to pay of my mortgage in full. Can't remember exactly - but this was originally £8050 @ 13% from the GLC - those were the days - Brixton was "redlined" by such as the Abbey National. I was 5 years into that, and rates might have dropped to 11.5% by then, so by no means a stupid thing to pay it off.
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UnderOpenSky
baseline neural therapy
Brainaddict
slight system overdrive
So a nationwide savings account I opened earlier this year is now advertising at a higher interest rate, but my rate stays the same. It is an account that allows withdrawals without penalties, so to get the new rate do I have to withdraw from that account and open a new one? Or will Nationwide save me the administrative bother and raise the interest rate on my account if I bug them about it? Seems really stupid to make me go to the trouble of opening a new account when it is literally the same one I opened earlier in the year.
