American businesses.
Low interest rates on savings
- Thread starter AnnO'Neemus
- Start date
Elpenor
a clown’s heart and a mandolin
My S&S Isa is up 20% in 17 months
If I was to take the gains it’s about 50% of my credit card debt (which is at 0% APR for now) and would buy me some headroom as this debt is likely to increase over the next year
Am uncertain what may happen to markets with Trump taking power
A nice problem to have i suppose
If I was to take the gains it’s about 50% of my credit card debt (which is at 0% APR for now) and would buy me some headroom as this debt is likely to increase over the next year
Am uncertain what may happen to markets with Trump taking power
A nice problem to have i suppose
Elpenor
a clown’s heart and a mandolin
Decided to withdraw the gains, I was getting twitchy about proportion of credit card debt I am carrying in relation to salary.
I will sleep easier with the debt being lower. It is likely to grow back to the same proportion over the next year or so , but 2025 is hopefully my last very expensive year assuming the thing that’s causing my current extraordinary costs is resolved.
If the market crashes then I’ve crystallised the gains and paid off debt, if it continues to soar then this time next year I may be to back to where I was anyway.
Pondering putting part of the withdrawal in a fixed savings account if i can find one with a decent rate that doesn’t penalise you for withdrawing within 12 months as some of the debt needs to paid off by next July
I will sleep easier with the debt being lower. It is likely to grow back to the same proportion over the next year or so , but 2025 is hopefully my last very expensive year assuming the thing that’s causing my current extraordinary costs is resolved.
If the market crashes then I’ve crystallised the gains and paid off debt, if it continues to soar then this time next year I may be to back to where I was anyway.
Pondering putting part of the withdrawal in a fixed savings account if i can find one with a decent rate that doesn’t penalise you for withdrawing within 12 months as some of the debt needs to paid off by next July
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AnnO'Neemus
Is so vanilla
I still haven't built any savings back up. But resigning without another job to go to during the summer didn't help - for ethical reasons - my boss had done/said some unethical stuff and I could no longer countenance continuing to work for him. I've done a couple of courses, though, which will hopefully solidify a career change and improve my earning potential. Well, I'm in the middle of a course, just about to do the last week and (hopefully) pass a test.
Really need to find a new job in the new year though.
Really need to find a new job in the new year though.
Elpenor
a clown’s heart and a mandolin
Good luck with the test AnnO'Neemus 
Thanks for the tip on Wealthify kabbes has been easyish to use so far
Thanks for the tip on Wealthify kabbes has been easyish to use so far
UnderOpenSky
baseline neural therapy
We got 2 year fixed rate at 4.5 for our very modest Mortgage overpayment fund. Quite a drop from the 8% Nationwide was doing, but the best I could find
Chz
Stark Raving Sane
There are some ISAs out there paying better than savings accounts at the moment. Which seems weird, but I guess doesn't help if you've more than £20k to put away somewhere other than a sock under the bed.
teuchter
je suis teuchter
But if you've decided for whatever reason that you want to do a low risk investment like a savings account, and you've got your ISA allowance available, it would currently make sense to put it in a cash ISA wouldn't it?
Monument is still doing 4.81% to Christmas, at which point it will drop to 4.55% (because of the recent reduction in base rate). You have to commit to holding more than £25,000, though (or something along those lines). Wealthify were at 4.64% until a few days ago, at which point they dropped to 4.39%. No restrictions. This is all instant access.
Yes, but there’s a lot of contingencies there. Why do you want to (only) do a low risk investment? The point of cash is that it covers your ups and downs over the course of the next 12 months. But you can’t take money out of an ISA and then put it back in again. With an ISA, you should be thinking long-term and then cash is a poor idea.
UnderOpenSky
baseline neural therapy
Instant access means the rate isn't fixed. I think it will keep dropping over the next few years, so it seemed to be worth doing.
I've got 4.9% percent on a cash ISA with Trading 212 which seems one of the better ones for quick access.
teuchter
je suis teuchter
If for whatever reason I have a total of £10k in savings and I want to know that a year from now, I can be sure of having £10k available if I need it, then I should save it as cash, should I not? And at the moment, there are better returns from putting it in a cash ISA than a regular savings account.
If I need to take it out in a year then so be it. It's not prevented me from using this year's ISA allowance for something else because I don't have anything else.
(This is all hypothetical, not my actual situation)
It’s impossible to discuss hypothetically, really. My first question would be why you need to be sure of having £10k available in a year. And then you can make up something that just leads to more questions.
teuchter
je suis teuchter
It seems to me that there are sufficient plausible hypothetical reasons, that you can't make a blanket statement about cash ISAs being a waste of the allowance.
Sure, you can construct plausible edge cases. And it’s always worth using the allowance over not using the allowance. But if you’re putting 10k into a cash ISA at 4% just for the certainty of the return, it is worth bearing in mind that 4% of 10k is £400 and you’re only saving the tax on that £400. That’s £180 tax if you’re a 45% marginal tax payer and £90 if you’re a basic rate tax payer. And you get a tax-free allowance on the first £1000 of interest you make on cash every year in any case. So there may not be any reason not to use the ISA, but there is likely no advantage to it either. Not unless you have something like £25,000 of cash elsewhere already making you £1000 interest, in which case I have to ask why it’s so important to put another £10,000 into an ISA.
The tax savings bit is kind of the point of the ISA. Without that, is the ISA option the absolute best rate? Maybe, but I’d have to see the complete market for comparison. If you want to lock your money up for a year, there are often good bond options out there. Otherwise, you need to take account of opportunity cost because it’s harder to switch in and out of other opportunities that become available. An extra 0.1% might well not compensate for that. Basically, hypotheticals are kind of useless.
Hollis
bloody furious
If you want low risk you could always stick it within a money market fund in a regular stocks and shares ISA.
I've bunged some money in this in the past:
Royal London Short Term Money Market Fund Y Acc Portfolio Overview | GB00B8XYYQ86 | Fidelity
I've bunged some money in this in the past:
Royal London Short Term Money Market Fund Y Acc Portfolio Overview | GB00B8XYYQ86 | Fidelity
If you're a basic rate tax payer. Otherwise it's £500/£0.
Riklet
procrastinación
Put your money into a pension if you can stomach the risk and arent saving for the immediate future. I have some ethical (ahem) stocks and shares jobby with Royal London paid into privately separate from work, average growth of 16% over the past year.... that is at maximum risk tbf so mainly stocks and shares.
If it's longer term and you can assume some risk you have to be crazy to be fannying around with some cash ISA at 4% unless the tax benefits are the main consideration for you. And even then the tax benefit to pensions are likely more fabourable. If youre going to lock away youre money you might as well go for a decent return, otherwise might as well just keep it in a current account that pays interest.
TLDR - Or for the lazy among us, just pay more into your workplace pension. Pay in 10% if you already have savings and can afford to. Even better if your workplace matches contributions over 3% proportionally, this is def worth checking.
If it's longer term and you can assume some risk you have to be crazy to be fannying around with some cash ISA at 4% unless the tax benefits are the main consideration for you. And even then the tax benefit to pensions are likely more fabourable. If youre going to lock away youre money you might as well go for a decent return, otherwise might as well just keep it in a current account that pays interest.
TLDR - Or for the lazy among us, just pay more into your workplace pension. Pay in 10% if you already have savings and can afford to. Even better if your workplace matches contributions over 3% proportionally, this is def worth checking.
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teuchter
je suis teuchter
According to MSE, if you are looking for easy access savings, then ISAs currently offer the best rates.
I don't think that it's entirely "edge case" that someone might have a sum between 0 and 20k that they don't want to lock away for a fixed period, and with which they don't want to risk a scenario where it has actually decreased in amount at the moment when they might need it.
Maybe they are unemployed and want to be sure they won't be in trouble if they don't manage to find a new job within a certain time period. For example.
Perhaps you can argue that "easy access" savings are kind of outside the scope of this thread though.
magneze
🎧
Indeed. Also, I feel like it's often missed that investing in the stock market can also be stressful because of this. Many people just don't need that extra worry.
