TSB - Interest Rates on Plus Account now at 0%

[Diddums]

It's TSB, I'd be more concerned about actually being able to withdraw my money or pay my direct debits, which is why they got binned from my wallet.

Yep, didn't they have that massive outage a year or so ago? It seems to be a bit of a train wreck of a bank.

Spare cash belongs in a S&S ISA, something low risk like a Vanguard fund (DYOR, there are loads of them to suit every risk appetite).

I actively avoid giving any banks any money as far as is reasonably practicable, they're all thieving scumbags, every single one of them. I'd happily make a batch of popcorn to watch them all burn to the ground.

 

[Dirk Diggler]

All of these banks and other companies that are reducing in credit interest due to the lower BOE rate. Are they also reducing the interest charged on their credit products by the same amount? I'm guessing no.

Actually, yes they are. APR on car finance etc is also pretty good right now.

 

[OldKitMan]

Why would zero percent interest encourage people to keep money at their properties?

It's if interest rates go negative, I'm not sure if negative interest rates would be passed onto savers as it would encourage runs on every place that did it I would think as people take their money out to avoid losing money.

I'd be quite happy though if it meant my mortgage rate got lower still.

 

[silversurfer]

NS&I have also reduced their interest rates too. I’ve gone from 1% (no great but better than most!) to 0.15%. It beats my Halifax BoS saver with an apparently preferential rate of 0.01%!

It was 10% when I was first saving in the early 90's. The EU ejected us from the EURO predecessor and we required high rates to retain faith in sterling now you have the world opposite Greece cant escape the Euro and worst currency wins. Might as well go premium bonds as you are unlikely to win but at least theres outside chances where as a guarantee of 0.01% is kinda silly.
The banks dont need your money because money is centralised now and infinite, we've left a capitalist system which is capital with the people and of defined value.

Invest in gold? if the government push forward with another lock down then in a few years people will probably be using their £50,000,000 notes as toilet paper (assuming loaves of bread are out of stock).

Sure if you have a ten year time frame its quite reasonable. Most are scared off by the large movements possible in any commodity market, gold is likely to gain as it has previous decades. Its not as useful for immediate cash unless you are very wealthy. I'd argue in favour of silly ideas like buying second hand silver cutlery so long as it is actually cheap unpopular and close to the spot price, you can use it mean time and in ten years get far more then your original money back or the possible interest nominally returned for cash.
Otherwise most will do best to manage the mortgage debt well, I'd argue in favour of overpayment using the lower rates as means to do so easily. Others will say its cheap debt and not to be repaid early but also its your home and security, becoming more secure equates to wealth imo and its the bank that owns your home till you repay it.

The worst position are those saving a house deposit, they have a leaky bucket that is constantly losing value.

https://www.marketwatch.com/story/b...09-17?mod=hedge-fund-moves-and-insider-trades

 

[englishpremier]

Actually, yes they are. APR on car finance etc is also pretty good right now.

I mean for those who have already taken them out. for example if you took out a CC at 18% APR are TSB (without you prompting them) going to say, oh yes the base rate is down, we can reduce your interest rate by 1.499%

But yes, as you allude to, low interest rates are great for borrowing, it can even be cheaper than using your own cash.

 

[Pawnless Endgame]

I'd still encourage you all to save if you can to tide time over inbetween jobs. Job-hunting was bad enough 10 years ago with the elitism attached to it, 2nd and 3rd interviews being commonplace and a success rate of less than 1%. I applied for not far off 200 jobs in the end, and the only thing that got me back into paid work was volunteering. The elitism is even worse now and it's being compounded by covid. If any of us are getting made redundant now or recently, it's going to be a hell of a lot worse than 10 years ago.

 

[Dirk Diggler]

I mean for those who have already taken them out. for example if you took out a CC at 18% APR are TSB (without you prompting them) going to say, oh yes the base rate is down, we can reduce your interest rate by 1.499%

But yes, as you allude to, low interest rates are great for borrowing, it can even be cheaper than using your own cash.

Yes, that's true. However, credit cards are a little bit more complicated as the interest rate is based on risk and the loan amount is variable depending on the spend. I don't think they're a great yardstick for interest rates.

 

[Puzzled]

It's if interest rates go negative, I'm not sure if negative interest rates would be passed onto savers as it would encourage runs on every place that did it I would think as people take their money out to avoid losing money.

I'd be quite happy though if it meant my mortgage rate got lower still.

What do you do with your money if interest rates go negative? I don't have a huge amount of savings so I would just take it out of the bank but for those with a fair bit they won't want all that cash in the house.

 

[Dirk Diggler]

What do you do with your money if interest rates go negative? I don't have a huge amount of savings so I would just take it out of the bank but for those with a fair bit they won't want all that cash in the house.

Invest it.

 

[The Running Man]

What do you do with your money if interest rates go negative? I don't have a huge amount of savings so I would just take it out of the bank but for those with a fair bit they won't want all that cash in the house.

Buy gold

 

[Diddums]

low interest rates are great for borrowing, it can even be cheaper than using your own cash.

Que? can you explain this? The only conclusion I can get to is that you get a better price by using finance.

 

[Surveyor]

It's if interest rates go negative, I'm not sure if negative interest rates would be passed onto savers as it would encourage runs on every place that did it I would think as people take their money out to avoid losing money.

I'd be quite happy though if it meant my mortgage rate got lower still.

If negative interest rates were applied to accounts I could see how some people might keep cash at home if there was nowhere else to put it. I was curious about @Energize's post as he made no reference to that.

 

[Puzzled]

Invest it.

Comes with potential risk though, if they just have it sat in the bank then they are likely to either be risk averse or financially uneducated.

Would certainly give the scammers plenty of victims to pick on.

 

[The Running Man]

Comes with potential risk though, if they just have it sat in the bank then they are likely to either be risk averse or financially uneducated.

Would certainly give the scammers plenty of victims to pick on.

To be fair isn't it the banks job to invest the money, either in terms of loans, mortgages and other investments?

 

[touch]

To be fair isn't it the banks job to invest the money, either in terms of loans, mortgages and other investments?

Investing and saving are very different things. Regardless of what the bank actually does with your money in your savings account, you're not exposed to any of the risk (or reward) associated with investments.

 

[Energize]

Why would zero percent interest encourage people to keep money at their properties?

Well if there's little benefit to putting cash into a bank account then why bother? Even myself I would probably end up allowing cash to accumulate somewhat if I had a 0% interest rate, as long as I can pay my bills there's no rush to put any extra cash into an account when credit cards are 0% etc.

If negative interest rates hit I could see people actively taking money out of bank accounts even.

 

[[FnG]magnolia]

Isn't a o% interest rate pretty far down most people's list of concerns? I'd have thought the two biggest are:

1. Oh woops, who invited negative interest rates to the party? Those guys are no fun; and
2. Oh no, why am I now carrying my money around in a wheelbarrow like some kind of 1930's Germany? Oh, Brexit? Oh.

 

[Yaayuh!]

Isn't a o% interest rate pretty far down most people's list of concerns? I'd have thought the two biggest are:

1. Oh woops, who invited negative interest rates to the party? Those guys are no fun; and
2. Oh no, why am I now carrying my money around in a wheelbarrow like some kind of 1930's Germany? Oh, Brexit? Oh.

^ Man’s got a point.

 

[glenimp617]

does this mean I get interest on my overdraft

 

[Dirk Diggler]

Comes with potential risk though, if they just have it sat in the bank then they are likely to either be risk averse or financially uneducated.

Would certainly give the scammers plenty of victims to pick on.

A savings account is a risk free investment up to £80k after which it's a very low risk investment. Low/negative interests rates will prompt some to take a bigger risk.

Personally, I'm content enough with 0% because as Mags just said, there's probably more to worry about right now. I should actually start pumping chunks into my mortgage, but I need a bit more reassurance regarding employment before I'm willing to do that.