Best Savings Rates

[Bullish Bear]

I understand that Birmingham Midshires are paying 5.1% on savings on their e-saver account.

Are there any better deals out there?

[hra]

Yes, there are marginally better instant-access Internet savings rates but not by all that much now. For a short period until 1st October, Birmingham Midshires were offering 5.4% on basically the same account as the one I think you're describing. What they seem to have done as of 1st October is re-issue their e-savings product (note the 'issue 2' in their description) with a reduced first-year introductory bonus as far as I can make out. Very probably you can still get better rates in a 1-year bond. Then there's always vintage wine or Outer Mongolian property etc.

[Lou G]

Alliance & L are paying 5.35% on a savings account.

Skipton are paying 5% on savings over 50k - base rate tracker.

Abbey are paying 5.35% on cash Isa's.

We are cashing in our premium bonds - return not good enough..!

[Bullish Bear]

Alliance & L are paying 5.35% on a savings account.

Skipton are paying 5% on savings over 50k - base rate tracker.

Abbey are paying 5.35% on cash Isa's.

We are cashing in our premium bonds - return not good enough..!

<{POST_SNAPBACK}>

Premium Bonds are not an investment - you are better off without them and using the interest on your savings to buy a lottery ticket.

If I believe my own advice, then fixed rate savings will be the best bet, as I believe that interest rates will fall next year.

[hra]

then fixed rate savings will be the best bet

I've been saying that for several months myself, and mentioned it previously in this thread. I am quite pleased about the 5.61% 1-year bond I took out in June, noting that the building society appears to have reduced the interest rate on new issues to 5.25% recently. (Well, at least I'll be pleased if they stay solvent until next June).

But there seems to be a new player heading the Moneyfacts Best Buys for fixed interest investment as of today: the London Scottish Bank. Anyone know anything about them (owned by, reputation etc)?

[Gooner]

when looking at savings accounts, do you check whether they're daily or annual interest compounding ?- I didn't (dufus) , but I got the BMS 5.4% mentioned above just under the wire before it went to issue 2. By my reckoning, there's a 0.13% effective interest rate difference between daily and annual interest. Is the A&L daily?

[M21er]

I've been saying that for several months myself, and mentioned it previously in this thread. I am quite pleased about the 5.61% 1-year bond I took out in June, noting that the building society appears to have reduced the interest rate on new issues to 5.25% recently. (Well, at least I'll be pleased if they stay solvent until next June).

But there seems to be a new player heading the Moneyfacts Best Buys for fixed interest investment as of today: the London Scottish Bank. Anyone know anything about them (owned by, reputation etc)?

<{POST_SNAPBACK}>

Try this link London Scottish

I understand that they are providers of home collected credit amongst other services. I personally would be more concerned about this bank than the mainstream high street banks and would consider the FSCS compensation limits when deciding the amount to invest. (Limits are 100% of the first £2k invested followed by 90% of the next £33,000) The maximum compensation payout is £31,700 with nothing payable on balances over £35k

[hra]

Thanks for the link, M21er. This puts their sudden appearance in the Best Buys table a bit more in context - although the 5.65% is actually a reduction from their previous rate (which I didn't realise and which they didn't offer for very long anyway) the other major players seem to have reduced theirs more substantially.

[Bullish Bear]

Halifax have a drip-feed account (£250 per month) paying 7%.

[M21er]

Halifax have a drip-feed account (£250 per month) paying 7%.

<{POST_SNAPBACK}>

BB

Halifax Regular Saver details

The headline rate is fantastic but once you read the conditions the actual cash benefits of opening the account are relatively small - the main drawback being that you have to transfer the accumulated sum after twelve months into another (lower paying) Halifax savings account. In reality, you would probably transfer back to IngDirect or another more competitive provider.

If you deposit £250 per month, you will save £3,000 over the year which means that your average balance is only £1,500 - the 7% is an extra 2% over and above IngDirect's account. The benefit is £24 pa for a basic rate taxpayer (£1,500 x 0.02 x 80% = £24)

It's a pity it doesn't have a longer period say 5 years which would have meant the extra interest would really start to mount up but I guess the cost to the Halifax would also mount up!

[Wise Buddah]

Best Savings Accounts (The Motley Fool)

[Bullish Bear]

Thanks Wise Buddah! You are indeed the wise one.

I fear however, that advertising revenues may take preference over providing the real facts.

[zzg113]

Bullish Bear, if you want the real facts try

http://www.moneyfacts.co.uk

It is a completely (almost) independent website and you can put in your requirements to find the best deal for you. Happy hunting!

[europbaron]

Abbey do a drip feed similar to the Halifax at 7%, between them you can put away £9000 in a year so over the year you'll get 7% on £4500 + whatever interest from the account you drip feed from.

No idea about longer term - maybe buy a house?

[red]

Bullish Bear, if you want the real facts try

http://www.moneyfacts.co.uk

It is a completely (almost) independent website and you can put in your requirements to find the best deal for you. Happy hunting!

<{POST_SNAPBACK}>

I've scoured the net and money mags for best buys, having just STR'd...the odd point percentage can really make a difference to the sizeable deposit you might have! I've been careful to spead the load across banks. These banks, to my knowledge, are independent of each other so I'm insured for the 30K in each account.

So here's my 'portfolio':

Northern rock @ 5.41% - 50K

Alliance & Leicester 5.35% (25K max.) - 25K

AA 5.31% - 30K

Bradford & Bingley 5.25% - 30K

First Direct 5.2% - 30K

Cahoot 5.1% - 30K

Premium Bonds 30K

Deutche Bank 'ratebuster' - 30K

Abbey National offer 5.4% for investments of 200K and over, but I couldn't sleep at night with all eggs in one basket! I also have a Cahoot bank account which is Abbey owned.

[The Masked Tulip]

255K in cash - WOW!

[hra]

Interesting that fixed rate savings have been creeping up again slightly, or at least some new players have appeared at the top of the Moneyfacts pile:

JULIAN HODGE BANK Capital Millennium Bond 1 Year Bond £1,000 5.40%

Never heard of them, has anyone else?

255K in cash - WOW!

Any better ideas? Not BTL portfolios, I take it. Commercial property funds?

Obviously an STR has to be looking at something fairly tax-efficient particularly if they have other sources of income, so perhaps that has been the appeal of Premium Bonds despite the low returns.

[The Masked Tulip]

JULIAN HODGE BANK Capital Millennium Bond 1 Year Bond £1,000 5.40%

Incredibly wealthy Welshman. Owns most of Cardiff City centre so has enormous rents coming in. He passed away recently.

[miche]

Egg - 5.5% for 6 months!

[red]

Egg - 5.5% for 6 months!

<{POST_SNAPBACK}>

Not any more. They withdrew that offer about 2 weeks ago.

:angry:

[red]

...

Any better ideas? Not BTL portfolios, I take it. Commercial property funds?

Obviously an STR has to be looking at something fairly tax-efficient particularly if they have other sources of income, so perhaps that has been the appeal of Premium Bonds despite the low returns.

<{POST_SNAPBACK}>

Absolutely spot on. I pay tax at 40% and want easy access to my money, so aside from no-notice internet accounts, the Premium bonds returns are SO much better...tax free! (Provided my numbers come up, of course.)

[hra]

Not any more. They withdrew that offer about 2 weeks ago.

:angry:

<{POST_SNAPBACK}>

Yes, unfortunately I just found out the same thing. It ended on 2nd March. They also offered some kind of guarantee whereby they would raise their rates within 14 days of BOE rates - something I hope a few other financial institutions catch on to - rate lag last year was fairly significant over the period and one reason I looked at fixed rate savings.

Premium bonds still have a £30K limit, don't they, but at least it's a start! Other than that, the tax position of being an STR is a fairly good incentive not to have a job, particularly a low-paid one!

[red]

Yes, unfortunately I just found out the same thing. It ended on 2nd March. They also offered some kind of guarantee whereby they would raise their rates within 14 days of BOE rates - something I hope a few other financial institutions catch on to - rate lag last year was fairly significant over the period and one reason I looked at fixed rate savings.

Premium bonds still have a £30K limit, don't they, but at least it's a start! Other than that, the tax position of being an STR is a fairly good incentive not to have a job, particularly a low-paid one!

<{POST_SNAPBACK}>

A perfect opportunity to go travelling, if you don't want to pay rent!

Then you can come back to collect your premium bonds winnings...

[hra]

A perfect opportunity to go travelling, if you don't want to pay rent!

Then you can come back to collect your premium bonds winnings...

<{POST_SNAPBACK}>

Funny that, I've just come back from South Africa as it happens

Kirstie had a bit to say about Sell-To-Backpack-ers, didn't she?

Re. premium bonds, I'm changing my mind slightly after looking at the latest figures for the average return: 3.2% which when grossed-up for a 40% taxpayer is still only 5.33, marginally less than the best fixed-rate bonds I mentioned (5.4%). Then there is the snag where you have to wait until the second calendar month after you apply, to be eligible for the draw. National Savings Certificates are worse: grossed-up from 3% they are only equivalent to 5% - a typical Internet account rate.

I wasn't joking about commercial property funds. The one in my HBOS pension plan has gone up 15% over the year and is still rising. Another good thing is that is is less volatile than most of their other funds and hopefully (that is the theory) it will be easier to spot when and if it falls.

[red]

Funny that, I've just come back from South Africa as it happens 

Kirstie had a bit to say about Sell-To-Backpack-ers, didn't she?

yes, it irked her that people had some savvy and were not as dumb as she is to devote her life to the pursuit of property ownership...

Re. premium bonds, I'm changing my mind slightly after looking at the latest figures for the average return: 3.2% which when grossed-up for a 40% taxpayer is still only 5.33, marginally less than the best fixed-rate bonds I mentioned (5.4%). Then there is the snag where you have to wait until the second calendar month after you apply, to be eligible for the draw. National Savings Certificates are worse: grossed-up from 3% they are only equivalent to 5% - a typical Internet account rate.

Agreed, but it forms the 'gamble' element to my portfolio. I might get less than 3.2% return, but then again I could come up trumps.

The vast majority of my cash is in high interest internet banks. And when the IR rise comes, we'll all be laughing!

I wasn't joking about commercial property funds. The one in my HBOS pension plan has gone up 15% over the year and is still rising. Another good thing is that is is less volatile than most of their other funds and hopefully (that is the theory) it will be easier to spot when and if it falls.

<{POST_SNAPBACK}>

Easy access? How long do you need to stash the cash before the returns become worthwhile? I need to get to my cash in case I need it... I considered other investments, but for short term, low risk, easy access, it had to be the Internet bank/premium bond route.