# Whatever happened to the interest on savings accounts?



## MontyVeda (18 Dec 2020)

Back in the 90s i had a savings account which gave 5 or 6% interest, but I had to give 60 days notice if i wanted to make a withdrawal... I've recently been looking for a similar savings account but the interest is barely above 1%... which is sh!te in comparison.

Why? Where, and when did the interest go?


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## I like Skol (18 Dec 2020)

MontyVeda said:


> Back in the 90s


Have you been living in an isolated cave for the last 30 years? The economic situation isn't quite what it was....


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## Brains (18 Dec 2020)

The Bankers "down their last million" bonus scheme ?

If you have a load of cash under the figurative mattress your best bet is Premium Bonds, as they typically pay above 1% in interest, 
otherwise invest with a ISA &/or Wealth Fund Manager, but that is typically for cash you are not going to need in the foreseeable future


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## Darius_Jedburgh (18 Dec 2020)

1%? 
As much as that?
Snatch their hands off.


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## itboffin (18 Dec 2020)

Put any saving you might have in bricks and mortar


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## MontyVeda (18 Dec 2020)

Darius_Jedburgh said:


> 1%?
> As much as that?
> Snatch their hands off.


seems kind of pointless... when £1000 saved only gets me £10 in interest.


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## MontyVeda (18 Dec 2020)

itboffin said:


> Put any saving you might have in bricks and mortar


How many bricks can i buy for £1000?

Seriously though... I'm just looking at somewhere to stash a couple of grand because that's how much I'll need when I have to move to a new flat/house; month's rent in advance, the same amount again for the deposit, the cost of moving, agent's fees etc. So I'll want to get my hand on it at shortish (4 weeks) notice.


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## screenman (18 Dec 2020)

Brains said:


> The Bankers "down their last million" bonus scheme ?
> 
> If you have a load of cash under the figurative mattress your best bet is Premium Bonds, as they typically pay above 1% in interest,
> otherwise invest with a ISA &/or Wealth Fund Manager, but that is typically for cash you are not going to need in the foreseeable future



I think you need a good bit of luck to get that, my premium bonds have not won a penny in the 53 years I have owned them.


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## Beebo (18 Dec 2020)

MontyVeda said:


> Back in the 90s i had a savings account which gave 5 or 6% interest, but I had to give 60 days notice if i wanted to make a withdrawal... I've recently been looking for a similar savings account but the interest is barely above 1%... which is sh!te in comparison.
> 
> Why? Where, and when did the interest go?


Check the current base rate for a clue. 
It’s been below 1% for years and is currently 0.1%.

Edit. I just checked it hasn’t been above 1% since Feb 09, which is almost 12 years ago.


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## Darius_Jedburgh (18 Dec 2020)

MontyVeda said:


> How many bricks can i buy for £1000?
> 
> Seriously though... I'm just looking at somewhere to stash a couple of grand because that's how much I'll need when I have to move to a new flat/house; month's rent in advance, the same amount again for the deposit, the cost of moving, agent's fees etc. So I'll want to get my hand on it at shortish (4 weeks) notice.


Just use an ordinary account. You are not going to get very much interest wherever you put it. It just ain't worth the hassle of shopping around for that small amount, especially if you need short notice withdrawals. 

Gordon Brown's legacy has long arms.


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## ColinJ (18 Dec 2020)

screenman said:


> I think you need a good bit of luck to get that, my premium bonds have not won a penny in the 53 years I have owned them.


What, _neither _of them?


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## DCLane (18 Dec 2020)

It's been going down for several years and went to almost nothing this year.

That's why I decided to pay my mortgage off yesterday.


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## MontyVeda (18 Dec 2020)

Darius_Jedburgh said:


> Just use an ordinary account. You are not going to get very much interest wherever you put it. It just ain't worth the hassle of shopping around for that small amount, especially if you need short notice withdrawals.
> 
> Gordon Brown's legacy has long arms.


aye... that's the only option really. Was just a bit surprised at how non-existent the interest rates are as I've not looked into savings accounts since about 1993.


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## PK99 (18 Dec 2020)

Brains said:


> The Bankers "down their last million" bonus scheme ?
> 
> If you have a load of cash under the figurative mattress your best bet is Premium Bonds, as *they typically pay above 1% in interest,*
> otherwise invest with a ISA &/or Wealth Fund Manager, but that is typically for cash you are not going to need in the foreseeable future



WRONG!

The prize pool rate is 1%.

Even with the maximum holding of £50k, the most likely return is 0.9%
https://www.moneysavingexpert.com/savings/premium-bonds/


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## Sharky (18 Dec 2020)

ColinJ said:


> What, _neither _of them?


When my first daughter was born, somebody gave me £3, with instruction to buy a premium bond. The minimum then was £5, so I added £2 and bought a single premium bond. Roll on about 10 years and a house move and I wrote to them advising change of address. To my surprise, she had won £50!


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## ColinJ (18 Dec 2020)

MontyVeda said:


> *aye... that's the only option really. *Was just a bit surprised at how non-existent the interest rates are as I've not looked into savings accounts since about 1993.


No, it _isn't_!

As has already been suggested... _PREMIUM BONDS_!



ColinJ said:


> I have done a rough calculation... I have averaged about 1 win per 20k bond-months.


If you averaged something similar, you would win about £25 for every 10 months that your £2k remained invested. You can get the money out in 8 working days.


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## vickster (18 Dec 2020)

My shares isa is running at around a 10% gain tax free right now, opened after the pandemic stock market crash when the previous one dropped like thousands
...obviously Brexit could fubar it again!

I have a regular savings account paying 1.85 and a fixed term cash isa doing similar, not sure you’d get that now though


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## Brains (18 Dec 2020)

screenman said:


> I think you need a good bit of luck to get that, my premium bonds have not won a penny in the 53 years I have owned them.



How many have you got ?
Statistically if you buy £10k's worth you will get something most months.
Which is why Financial Advisors suggest they are the best place to stash cash that you know you will need within a few months or a couple of years.

Maximum amount you can purchase is £50k


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## MontyVeda (19 Dec 2020)

I'll post this very recent video regarding premium bonds...


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## screenman (19 Dec 2020)

Brains said:


> How many have you got ?
> Statistically if you buy £10k's worth you will get something most months.
> Which is why Financial Advisors suggest they are the best place to stash cash that you know you will need within a few months or a couple of years.
> 
> Maximum amount you can purchase is £50k




Let me count them, two.


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## steveindenmark (19 Dec 2020)

Jannie and I have had a shuffle around of our savings recently. The banks are now talking about charging interest over a certain amount you keep in the bank. Im glad I have plenty of suitcases in the loft because that is where the excess will be going. 😁


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## sheddy (19 Dec 2020)

If anyone has suggestions do let us know. I had a 2% rate, but finishes after Christmas.
Not PB.


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## ianrauk (19 Dec 2020)

screenman said:


> I think you need a good bit of luck to get that, my premium bonds have not won a penny in the 53 years I have owned them.


I'm very surprised at that. I get 4 or 5 wins a year. But thats the luck of the draw I suppose.

Edit. Just seen the following posts re PB's


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## ianrauk (19 Dec 2020)

DCLane said:


> That's why I decided to pay my mortgage off yesterday.


March will be my turn.


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## MontyVeda (19 Dec 2020)

ianrauk said:


> I'm very surprised at that. I get 4 or 5 wins a year. But thats the luck of the draw I suppose.


have you got more than 2 though?

If i did go the PB route, I'd be putting in £1000 to begin with and building up to £2000 (that being the minimum financial safety net that i feel i need to squirrel away). According to Martin Lewis, my initial grand's worth of bonds will win bugger all, and my target will get me double bugger all.

Maths isn't my strong point.


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## ianrauk (19 Dec 2020)

MontyVeda said:


> have you got more than 2 though?
> 
> If i did go the PB route, I'd be putting in £1000 to begin with and building up to £2000 (that being the minimum financial safety net that i feel i need to squirrel away). According to Martin Lewis, my initial grand's worth of bonds will win bugger all, and my target will get me double bugger all.
> 
> Maths isn't my strong point.


Yep, slightly more than 2 
£1000 is a good start, you'll sure to win something with that at least a couple times a year.


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## Salty seadog (19 Dec 2020)

MontyVeda said:


> Back in the 90s i had a savings account which gave 5 or 6% interest, but I had to give 60 days notice if i wanted to make a withdrawal... I've recently been looking for a similar savings account but the interest is barely above 1%... which is sh!te in comparison.
> 
> Why? Where, and when did the interest go?



They lost interest..


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## Juan Kog (19 Dec 2020)

steveindenmark said:


> Jannie and I have had a shuffle around of our savings recently. The banks are now talking about charging interest over a certain amount you keep in the bank. Im glad I have plenty of suitcases in the loft because that is where the excess will be going. 😁


Sorry the suitcase plan is rubbish . I'm going to invest in titanium , it really is the only option


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## steveindenmark (19 Dec 2020)

Juan Kog said:


> Sorry the suitcase plan is rubbish . I'm going to invest in titanium , it really is the only option


I already have titanium 😁


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## Profpointy (19 Dec 2020)

My mortgage is barely over 2% so give them maybe 2% less than that to run the bank, cover risk of default and so on, the savers' rate is going to be pretty low. Also inflation is pretty low these days, so getting 5% back in thr day when inflation was 10% was an even worse deal


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## itboffin (19 Dec 2020)

MontyVeda said:


> How many bricks can i buy for £1000?
> 
> Seriously though... I'm just looking at somewhere to stash a couple of grand because that's how much I'll need when I have to move to a new flat/house; month's rent in advance, the same amount again for the deposit, the cost of moving, agent's fees etc. So I'll want to get my hand on it at shortish (4 weeks) notice.


 If you have a mortgage chances are your interest rate will be around 2% so put what savings you have in the mortgage almost all banks I know of in the uk let you take it back out whenever you want, I did this with my fecking useless isa years ago I only wish I could do the same with my pensions.


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## itboffin (19 Dec 2020)

I’m going to invest my tiny amount of spare cash in bikes to go with the MASSHOOF amount I’ve already spent on bikes


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## Juan Kog (19 Dec 2020)

steveindenmark said:


> I already have titanium 😁


Why stop at one, a second would be a very sound investment.


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## MontyVeda (19 Dec 2020)

itboffin said:


> If you have a mortgage chances are your interest rate will be around 2% so put what savings you have in the mortgage almost all banks I know of in the uk let you take it back out whenever you want, I did this with my fecking useless isa years ago I only wish I could do the same with my pensions.


putting money aside to cover moving costs such as 1st months rent and a deposit strongly suggests that I don't have a mortgage


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## MntnMan62 (19 Dec 2020)

MontyVeda said:


> Back in the 90s i had a savings account which gave 5 or 6% interest, but I had to give 60 days notice if i wanted to make a withdrawal... I've recently been looking for a similar savings account but the interest is barely above 1%... which is sh!te in comparison.
> 
> Why? Where, and when did the interest go?



Really? Have you not paid attention to interest rates in general? They are at historical lows. Why should banks pay you a healthy interest rate when they can't charge such a healthy interest rate on loans? I'm scratching my head at your question.


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## MontyVeda (19 Dec 2020)

MntnMan62 said:


> Really? Have you not paid attention to interest rates in general? They are at historical lows. Why should banks pay you a healthy interest rate when they can't charge such a healthy interest rate on loans? I'm scratching my head at your question.


some of us have had better things to do in the last three decades than look at interest rates


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## MntnMan62 (19 Dec 2020)

MontyVeda said:


> some of us have had better things to do in the last three decades than look at interest rates



Really? I've been investing my hard earned money for the past three decades so that at some point I can live off that money without having to work. Anyone who has money to invest pays attention to interest rates. Someone who makes fun of people for paying attention to interest rates must not have money to invest of their own. But that's ok. I'm sure you still feel real good about chastizing someone for being aware of where interest rates are. That says all I need to know about you.

P.S. I'm also a short tempered ill controlled small minded troll.


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## MontyVeda (20 Dec 2020)

MntnMan62 said:


> Really? I've been investing my hard earned money for the past three decades so that at some point I can live off that money without having to work. Anyone who has money to invest pays attention to interest rates. Someone who makes fun of people for paying attention to interest rates must not have money to invest of their own. But that's ok. I'm sure you still feel real good about chastizing someone for being aware of where interest rates are. That says all I need to know about you.
> 
> P.S. I'm also a short tempered ill controlled small minded troll.


You're also a rather patronising individual. 

Bye!


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## Tenacious Sloth (20 Dec 2020)

MontyVeda said:


> putting money aside to cover moving costs such as 1st months rent and a deposit strongly suggests that I don't have a mortgage



Serious question. It seems that more and more people are having to rent nowadays and with the diminishing number of council houses private rents often seem as much as, or often more than, the cost of a mortgage. How do renters manage to pay their rent when they retire?


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## byegad (20 Dec 2020)

MontyVeda said:


> Back in the 90s i had a savings account which gave 5 or 6% interest, but I had to give 60 days notice if i wanted to make a withdrawal... I've recently been looking for a similar savings account but the interest is barely above 1%... which is sh!te in comparison.
> 
> Why? Where, and when did the interest go?


2008. The ruddy* bankers stuffed the economy and people who had savings have seen pathetic interest since.

*I had a better word but decency and all that.


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## MontyVeda (20 Dec 2020)

Tenacious Sloth said:


> Serious question. It seems that more and more people are having to rent nowadays and with the diminishing number of council houses private rents often seem as much as, or often more than, the cost of a mortgage. How do renters manage to pay their rent when they retire?


if there's anything left of the welfare state when I'm 67... I'll be looking towards that most likely.


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## MntnMan62 (20 Dec 2020)

MontyVeda said:


> You're also a rather patronising individual.
> 
> Bye!



I'm going to assume that you put me on ignore. I'm ok with that. But on the chance that you haven't put me on ignore, I'll just point out that it was YOU who started with the patronizing idiocy, saying that you have better things to do than pay attention to interest rates for the past three decades. Your comment demanded an equal response. So, it seems that you are able to dish it out but you can't take it when it's tossed back your way. I guess that means that it's you who is the patronizing individual. 

Bye!


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## ColinJ (20 Dec 2020)

Tenacious Sloth said:


> How do renters manage to pay their rent when they retire?


In the UK - Housing Benefit!

My pension income will be so low that I will (at current rates) get about 85% of my rent paid. Obviously, rents can go up, and benefits can be reduced.


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## screenman (20 Dec 2020)

I think you might find an African prince somewhere who may give you a good return on your investment, I know some used to write to me but I was too busy making money.


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## screenman (20 Dec 2020)

ColinJ said:


> In the UK - Housing Benefit!
> 
> My pension income will be so low that I will (at current rates) get about 85% of my rent paid. Obviously, rents can go up, and benefits can be reduced.



You best hope your games come to market.


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## ColinJ (20 Dec 2020)

screenman said:


> You best hope your games come to market.


I do worry that benefits will be cut, but as things stand I would do fine - I would get a total (including pensions) of about £13k/year, which would be ample.

Having said that... I would really like to start paying income tax again as a pensioner! It would mean that I had plenty of spending money, could put some aside for future needs, and could point out to my naysayers that I am actually only 50% deluded!


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## Jenkins (20 Dec 2020)

Tenacious Sloth said:


> Serious question. It seems that more and more people are having to rent nowadays and with the diminishing number of council houses private rents often seem as much as, or often more than, the cost of a mortgage. How do renters manage to pay their rent when they retire?


Chap I work with is eligible for a full works pension, but can't afford to go for another couple of years when his state pension kicks in due to this.


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## SpokeyDokey (21 Dec 2020)

Fed up to the back teeth re low interest rates.

Apart from heating up the property market and driving prices up they have spawned a whole raft of unsustainable debt that will have people squealing in anguish once rates rise - and they will eventually. Spending will eventually come back to haunt those that were less than sensible about their long-term financial future.

On the personal front it has been very hard to decide what to do with our ISA's and FRB's as their fixed term periods come to an end. On the upside we have only one coming to end in the near-term - in January 2021 (2.55% 3yr FRB with NS&I). And then we are 'off the hook' until Nov 23 when the next FRB finishes.

Funds invested that are due to 'finish' for us in the range 2023-2027 are currently yielding 2.11% overall and in today's market that's not too bad.

Hopefully, there will be some sanity restored in the savings/lending market by then and rates will be higher - fingers crossed.


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