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It is coming up to "Pick an ISA" time again. I am unable to understand why most banks seem to be offering X% on cash ISAs (tax free obviously) but can offer X+1% on bonds on which tax is payable. If they have my money why does the rate vary depending on where it is? Any easy answer please?
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If you're talking about savings bonds that are protected under FSCS, then the only legitimate difference I can think of is the term and penalties - you would expect a better rate for a fixed, longer term with higher penalties for early withdrawals. Does that apply?
The banks would probably also say that they have additional administration costs with ISAs.
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No, I was just looking at ISA rates vs Bond rates for similar terms of time and access. I don't see that there is any difference in administration costs and the deposits are covered by the FSA scheme. It just seems that taxable bond interest rates are higher than tax free ISA rates and I can't see a reason for this. It is very hard to find any rate that beats inflation at the moment!
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>> I don't see that there is any difference in administration costs
I did say that the banks "would" say that.
I wasn't expecting to post a link from the Daily Mail - albeit a year old. Obviously their "campaign" didn't work!
www.dailymail.co.uk/money/article-1244522/STOP-Greedy-banks-steal-Isa-tax-breaks.html
Last edited by: Manatee on Sat 26 Feb 11 at 09:48
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Interest rates for the past few years have been a joke - inflation, never mind tax, wipes out any financial rewards. Yet the financial institutions are still charging high rates for borrowing, credit cards etc.
I've been taking the view that if you want or need something it's best to buy it before the price goes up, as it inevitably will.
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>> tax, wipes out any financial rewards. Yet the financial institutions are still charging high rates
>> for borrowing, credit cards etc.
Mortgages have *never* been cheaper. I was paying 1% interest.
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>>Mortgages have *never* been cheaper. I was paying 1% interest.>>
Wish they'd been that low when I had a mortgage...:-((
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As Mapmaker has said, some people have never know high interest rates on mortgages, nasty shocks on the way.
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I doubt it'll go as high this time, though.
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no probably not - but with a good one currently being 5%, and the bank rate at 0.5%, I would be looking at mortgage rates around the 7% (possibly 8%) mark by year end if you haven't already fixed.
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That would be my guess. Glad I'm out of it.
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a lot of anylists are thinking about 7-9percent in 12 months.
that will be very bad as a lot of mortgage holders cant remember high rates and have no idea that they could get that high.
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Investments & Interest Rates - Manatee
