QE - killing interest rates for prudent savers.

[SkipdiverJohn]

When considering who the villain of the peace is when it comes to nailing down interest on cash, you have to ask yourself; who are the largest debtors with the biggest vested interest in minimising the interest due on their borrowings. The answer of course, is governments, who routinely run deficit budgets even in good times and therefore seek to game the system to reduce the interest payable.
Some academic at the BOJ researched real interest rates going back something like 700 years, and rates have been on a downward trend, with a few blips, for much of that whole period!

 

[Salty seadog]

What a PITA QE is for us savers.

We have two Virgin Fixed Rate ISA's coming to an end next month worth in the low 6 figures combined and both on a 5 year lock at around 2.55%.

Now that banks etc do not want the public's money the number of ISA's and FRB's on the markets are diminishing in droves by the day and the current best we can find is a 5 year FRB with RCI Bank (who we already have savings with) and they are only paying 1.4% for a 5 year lock. And that'll probably be gone by the time the 2 Virgin ISA's expire.

Most other deals are <1% excluding some 'Sharia' FRB deals that I don't particularly want to invest in.

What a nightmare. Not sure what to do tbh.

Not interested in PB's.

We have around 10% of our total savings invested in funds and thus subject to stock market fluctuations - we are comfortable with this amount ie 10% but would be prepared to increase this if we have to.

We also have a chunk in NS&I Income Bonds (about £40k) at just over 2% and they end in January 2021. So another problem looming soon,

Fortunately most of our savings are in ISA's and FRB's that are locked until 2022-2025 with an average interest rate of 2.21% which we are more than comfortable with in today's market although rates have been the absolute dregs since 2008.

So... wise people of CC. What do we do with the chunk of money that will be floating around needing a home next month.

Any sensible suggestions welcome. NB: our appetite for risk is Moderate (boring old gits we are).

I know you said you're not interested in premium bonds but with that amount I would definitly max out in pb's. Tax free no risk.