Super Boomed

[ChimpMaster]

Are there any genuinely good savings rates though?

I notice the Halifax with their crass commercials only offer their "60 times better than other banks" interest rate on the first 1 or 2 grand. That's going to make all the difference. Yet I bet loads of suckers fall for it without noticing the small print.

I fixed a lump sum with Nationwide at 6.7% a couple of months back, on a 1 year bond. I think the rate offered is now 6.25%.

The highest rates are often offered by the most desparate banks. Northern Wreck were offering 6.9% at the same time but I chose NW for more security.

[DimPrawn]

HSBC have a savings account offering 12% interest.

(for balances up to £2000).

[PAH]

This would also explain the high savings account rates available at the moment.

Are there any genuinely good savings rates though?

I notice the Halifax with their crass commercials only offer their "60 times better than other banks" interest rate on the first 1 or 2 grand. That's going to make all the difference. Yet I bet loads of suckers fall for it without noticing the small print.

[ChimpMaster]

Just because the BoE drop rates doesn't mean that banks will follow suit. So all the really thick journals out there who keep touting for rate cuts to help home owners really need to go back to Economics 101.

The credit crunch has meant that many banks may now be short of funds to lend out themselves, and so they are not willing to give out cheap loans or loans to higher risk profiles. This is primarily due to the inter-bank lending rate (LIBOR), which is high compared to the past few years due to the level of mistrust in the financial sector. Banks are not willing to lend to each other because they do not know each others' true financial position - hence the Northern Wreck crisis.

This would also explain the high savings account rates available at the moment. With BoE rates falling, why are banks giving you a good savings rate? It's because they want to tempt in as much deposits as they can, in order to build up their capital base and enable them to keep funding business as normal. It's cheaper for the banks to offer you a higher savings rate, rather than go to the banking market and borrow funds from there.

[PAH]

In theory yes. But in practice no. Banks lost a packet in the credit crunch - and someone has to pay for their stupidity. It is always us.

Oh well. At least I don't have to spend weeks trying to decide what car to get next, just keep the one I've got for a while longer. By then the overpriced nearly new stuff will have depreciated nicely.

[BrilloPad]

If they do keep dropping interest rates does that mean other forms of finance, such as car loans will also be cheaper?

I like to fund my 'new' cars using finance rather than draw divvies and risk going into the 40% tax bracket, so hopefully the APR typically quoted for unsecured £10-20k loans will come down too.

It might make sense for me to get a new car loan soon whilst there's a lull in interest rates.

In theory yes. But in practice no. Banks lost a packet in the credit crunch - and someone has to pay for their stupidity. It is always us.

[PAH]

If they do keep dropping interest rates does that mean other forms of finance, such as car loans will also be cheaper?

I like to fund my 'new' cars using finance rather than draw divvies and risk going into the 40% tax bracket, so hopefully the APR typically quoted for unsecured £10-20k loans will come down too.

It might make sense for me to get a new car loan soon whilst there's a lull in interest rates.

[Pondlife]

Get in to the BTL market quick and fill ya boots

The Bank of England's rate-setting Monetary Policy Committee (MPC) voted by 8-1 to cut interest rates to 5.25% earlier this month, minutes have shown.
The bank decided to lower rates by a quarter of a percentage point from 5.5% in February, amid signs of a slowdown.

David Blanchflower was the only member who voted differently, favouring a larger cut in rates to 5%.

Linky