Negative interest rates

[kevenh]

So what do you recommend please?

I opened a Virgin account and got my free wine BUT it only pays £1.70 per month on a max of £1000 (2.02% gross)
Santander paid £10.13 +£2.92 cashback and charged £5 on £20k (0.6%) [that will drop to 0.3% and £4 charge].
NationWide FlexPlus provides my breakdown insurance plus others for £13pm (=£156 pa - cheaper than other options).

TIA - Gordon

I haven't switched for a while. Still with Santander. I'm open to switching but at MSE here nothing jumps out from this quick summary for my situation.

edit: I've been with Smile, First Direct & Cahoot.

I sat with a negative balance at FD for months - they rang me to complain about how I was (ab)using their free overdraft - lol

 

[Brains]

But then today they also say economy will pick up late spring if vaccine programs continues as it has

Sunak is saying the economy will pick up in the Spring 2021
The BOE is saying the economy will begin to pick up in Spring 2022
In my opinion the economy will only really start to pick up in the Spring of 2023.

One would hope that the economy will be back to 2019 levels by late 2023 or early 2024.

However the UK has already fallen to 3rd position within geographical Europe, the UK is on its way to 5th position by the mid 2020's

 

[hymerman]

Can anyone who has real life expertise in this area please tell me. Will the bank want me to pay them to look after my savings? If they do expect me to pay they’re going to be severely disappointed.

Unless you're already earning more interest than the rate of inflation, you are already effectively paying for them to look after your money.

 

[Rapido925M]

Unless you're already earning more interest than the rate of inflation, you are already effectively paying for them to look after your money.

So I only get £60 (gross)pa from Santander for letting them look after my money BUT if I take it out and keep it under my bed I don't get anything AND I run the risk of some scrote stealing it.

Difficult decision?

Gordon

 

[Phileas Fogg]

I keep a Nationwide Flex Plus account simply because the £13 a month fee gives me free breakdown cover for any number of vehicles up to 7.5 tons and free worldwide travel insurance, the account has just a few pounds in it but also gives access to savings accounts which whilst paltry are better than nothing. For £156 a year I wouldn't even get close to the worldwide travel insurance for two of us let alone the breakdown cover. I will stick with that plus at the moment Santander 123 for everyday but that is always under review!
I suspect this what we might see in the future, you pay a fee but get some sort of packaged return as an incentive to use the bank.
It is surely relevant to the size of your savings pot, whether you are earning or living on a pension, cash rich or asset rich.
No straightforward answer, all we know for sure is thanks to the virus we have the biggest debt in history and it will have to be paid back somehow, choppy waters ahead captain!

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[EuroTrotters]

I have used nationwide since I was 15. Fantastic current account.

In Spain we bank with Santander. As we are not resident, we pay charges per transaction.

Only residents can get the Cuenta 321

 

[Brains]

Sunak is saying the economy will pick up in the Spring 2021
The BOE is saying the economy will begin to pick up in Spring 2022
In my opinion the economy will only really start to pick up in the Spring of 2023.

One would hope that the economy will be back to 2019 levels by late 2023 or early 2024.

However the UK has already fallen to 3rd position within geographical Europe, the UK is on its way to 5th position by the mid 2020's

I see the airlines have announced today they are working on Spring 2025 for a return to 2019 levels across Europe, however that does not include the UK, as Italy and Spain will overtake the UK, pushing the UK to 5th position

 

[Minxy]

So what do you recommend please?

I opened a Virgin account and got my free wine BUT it only pays £1.70 per month on a max of £1000 (2.02% gross)
Santander paid £10.13 +£2.92 cashback and charged £5 on £20k (0.6%) [that will drop to 0.3% and £4 charge].
NationWide FlexPlus provides my breakdown insurance plus others for £13pm (=£156 pa - cheaper than other options).

TIA - Gordon

At present you're getting around 0.48% which will reduce to around 0.24%, that's after taking into account interest and cashback, but this only works if you have it at nearly £20,000, the less that's in it then the % rate of return reduces.

You can get a 0.55% or 0.5% easy saver without all the hassle - as we're paying off our mortgage at present I haven't got a lot in savings etc so haven't bothered keeping tabs on them that much but certainly when it drops to 0.24% you've got nothing to lose by going elsewhere but don't keep the Santander one open as well as it will 'cost' you if you don't max the interest at £20,000.

 

[Minxy]

Rapido925M

Okay thinking about this some more ... look at Lloyds CAs as you get the equivalent of 0.78% overall on £5,000 (same as Bank of Scotland but you get freebies with Lloyds). You can have individual and joint accounts so 3 in total, meaning £15,000 on which you get interest. You need to have 2 DDs for each account to get the interest and also a 'feeder' account to pay in the required amount each month to ensure you don't pay the £3 monthly fee (your Virgin account could do this - just set up as a SO to send the money from the Lloyds CA to Virgin and then back into Lloyds, so you are just 'recycling' the money; just do this for each of them. You'd then get 3 x the perks too.

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[jongood]

Get your money in something you can use while it's going up in value, anything old, cars, tractors, bus's, motorbikes, houses, anything that you have an interest in, numbers on a piece of paper in a bank account are no use until you spend it.

Ive been trying that one on my wife...she just wont have it - bank of E Type Jag?

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[Clipgate]

Fiat currency is exactly that, negative interest rates have been tried as an instrument of last resort, however the question is were does it lead. The simple answer in my view is no one knows, when economies are failing do to many causes, in our case baseless money supply the outcome is unpredictable.
Many will have advice, however if you want the truth look at where the political class are moving money too.

 

[Smudger55]

With my limited knowledge if negative interest rates mean we are charged for looking after our money could we go the other way and gain by going into overdraft? What would happen then?

 

[Coolcats]

Ive been trying that one on my wife...she just wont have it - bank of E Type Jag?

My Wife understands that it is essential for this type of investment to go ahead and has seen it happen many times.

 

[Coolcats]

With my limited knowledge if negative interest rates mean we are charged for looking after our money could we go the other way and gain by going into overdraft? What would happen then?

Like the way you think

 

[westhamman]

It is surprising they don't charge for having accounts. I'm certainly know expert on these matters, but I believe its possible that the banks would pay you for having a loan, you after all are looking after their money. The loan agreement wouldn't allow this of course.

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[kevenh]

With my limited knowledge if negative interest rates mean we are charged for looking after our money could we go the other way and gain by going into overdraft? What would happen then?

It is surprising they don't charge for having accounts. I'm certainly know expert on these matters, but I believe its possible that the banks would pay you for having a loan, you after all are looking after their money. The loan agreement wouldn't allow this of course.

There is scope for banks to encourage their debtors in preference to their creditors.
We had some musing’s on this on page 1, like this.

From those external links, terms & conditions on variable mortgages will limit reductions and obv. a fixed mortgage is unchanged.
Credit cards & loans are already considered at a low rate with little reduction possible.
Savers will likely goto 0%.

So we’re not sure how banks will pass on their costs of paying the BoE negative interest costs.
Could be account fees.
Or negative interest on a few high value savers’ accounts.

edit: a break out in this Guardian link mentions that Dutch mortgages can be negative & muses UK banks could too.

 

[Riverbankannie]

So I only get £60 (gross)pa from Santander for letting them look after my money BUT if I take it out and keep it under my bed I don't get anything AND I run the risk of some scrote stealing it.

Difficult decision?

Gordon

I agree, just looking back, I typically get £15 - -18 a month in interest and cashback, then take off the £5, so that’s better than the instant access savings accounts and for that I get all the services of the banking system which is one of the necessary services.
compare that to all the standing charges plus usage on electric, gas, water etc.

 

[bigtwin]

if you want the truth look at where the political class are moving money too.

Where do I need to look for this?

Have you also moved your money there?

Ian