Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Inflation Consequences for the Stock Market, FED Balance Sheet - 24th Oct 21
To Be or Not to Be: How the Evergrande Crisis Can Affect Gold Price - 24th Oct 21
During a Market Mania, "no prudent professional is perceived to add value" - 24th Oct 21
Stock Market S&P500 Rallies Above $4400 – May Attempt To Advance To $4750~$4800 - 24th Oct 21
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Best Cash ISA SBI 2.3% - 2.8 Year Fix, UK Interest Rates 2016

Personal_Finance / ISA's May 26, 2015 - 03:57 AM GMT

By: Nadeem_Walayat

Personal_Finance

Britain's interest rates starved savers for especially the tax free Cash ISA savings accounts for which Britains banks tend to further penalise by typically paying LESS interest than the SAME term NON ISA accounts, can only be disgusted that despite the large annual ISA allowance of £15,240, are going to find it near impossible to find savings interest rate of over 2%, let alone the pre-funding for lending scheme days (July 2012) when fixed savings interest rates ranged as high as 5%.


UK Deflation Propaganda

The crisis for Britain's savers is not being helped by the recent dip in CPI Inflation to -0.1% thus giving an excuse for Britain's banks to further CUT savings interest rates as the banks continue to effectively suckle on the teat of the Bank of England for cheap money instead of seeking funds from retail savers.

Whilst the mainstream press continues to swallow Bank of England deflation economic propaganda as their focus is firmly on CPI if -0.1% for April 2015, and usually reported in ignorance of the fact that RPI, which is the closest thing to real inflation stayed put at 0.9% and is set against the demand adjusted UK real inflation rate of 1.4%. So in reality there is no deflation, and that's before one even considers house prices inflation which is galloping along at 9% per annum, so don't be under any illusion, recent deflation stories are pure economic propaganda.

Instead my view as of March 2015 is that UK CPI official Inflation data for Jan 2016 will be at least 1.5% and RPI 2.5%. (25 Mar 2015 - Zero UK CPI Inflation Rate Prompts Deflation Danger Propaganda For Fresh Money Printing). So today's -0.1% deflation is very temporary, a flash in the pan, and so today's approx 1 year behind the curve deflation warnings in the mainstream press will instead a year from now be replaced with warnings of run away inflation as I expect UK CPI inflation to start taking off to stand at well above 2% by May 2016, with RPI at 3% whilst real inflation will be homing in on 4%.

The table below further illustrates what has happened to cash ISA rates offered by apparently often reported on as best buy accounts of the tax payer bailed out Halifax mega-bank that in reality crashed in response to the Bank of England's Funding for Lending Scheme that started in July 2012.

Halifax ISA's May 2012 Sept 2012 Nov 2012 Mar 2013 May 2013 July 2013 Mar 2014 June 2014 Mar 2015 % Cut
Instant Access
3%
2.75%
2.35%
1.75%
1.35% 1.35% 1.5% 1.30% 1.05% -65%
1 Year Fix
2.25%
2.05%
2.05%
1.75% 1.75% 1.65% 1.5% 1.40% -38%
2 Year Fix
4.00%
3.25%
2.25%
2.5%
2.10% 2.10% 2.05% 1.8% 1.65% -59%
3 Year Fix
4.25%
3.75%
2.35%
3.00%
2.25% 2.25% 2.25% 2% 1.75% -59%
4 Year Fix
4.35%
3.80%
2.40%
3.05%
2.30% 2.30% 2.40% 2.10% 1.85% -57%
5 Year Fix
4.50%
4.15%
2.60%
3.10%
2.35% 2.35% 2.5% 2.20% 2.00% -55%

The table shows that the tax payer bailed out Halifax continues to across the board pay abysmally poor rates of interest.

Current Best Cash ISA

Having trawled many ISA issuers that like the Halifax typically offer less than 2% for multi-year fixes, the only bank that really stands out is the State Bank of India's 1000 day (2.77 year) Fixed rate ISA that pays 2.3%. Yes I know there are others that pay marginally more for a longer fix such as the Punjab bank 4year 2.5% fix where the problem is one has to visit a distant branch, for what? an extra £20 per year? And similar holds true for other providers with their obnoxious small prints.

State Bank of India

Who are they ?

Obviously an indian bank, but what is important is that they are regulated by the FSA. Furthermore one CAN open an account online AND the SBI allows transfers in AT time of account opening.

Other Important Points to note -

* 1% loss of interest for early closure i.e. effective rate of 1.3%. But what is not clear is that just for 1 year or does it apply to the WHOLE term. Commonsense would suggest it applies to the year of withdrawal only.

If the account is closed before the end of the agreed term, interest will be paid at 1% less than the applicable rate of interest. For example, if the interest rate was 2.3% AER, an effective interest rate of 1.3% will be paid if the deposit is withdrawn or transferred before the end of the term.

* A savings account is also opened, and the ISA is only available to those who DO NOT ALREADY HOLD AN SAVINGS ACCOUNT with SBI.

* Minimum deposit is £15,000, Max £15,240.

So what happens when one opens an account ?

On clicking the Apply Now Button one is sent to https://sbiukonlinesavings.com/sbi_isa/

The whois public record apparently states the SBI savings application domain is registered to a James Sanders of Plan B Funding.

Looking into Plan B Funding (http://www.pbfsolutions.co.uk) reveals that they provide online services for financial institutions and as well as State Bank of India list ICICI and UBL amongst their clients. The company is based in Manchester and dates back 2.5 years.

Next - What happens when one opens an account?

The online application process is pretty straight forward i.e. populate the online form with your details and on clicking submit are instantly given an account and reference number to fund.

DAY 1 - No email confirmation of account opening. Opening deposit sent - No confirmation of receipt of deposit.

DAY 2 - Nothing

Day 3 - Cryptic text message stating £15,240 withdrawn ???

Day 4 - Nothing

Day 5 - Nothing - Sunday

Day 6 - Nothing - Holding off calling their 0800 number.

Day 7 - Nothing - Holding off calling their 0800 number.

Day 8 - Nothing - Holding off calling their 0800 number.

Day 9 - Letter stating SBI Online Instant Access Account Issue 4 opened.

Day 10 - 3 letters - 2 passwords for online access and a certificate of investment.

So in the communications department SBI rates very poorly, as I am sure many applicants by day 6 will be calling up the bank to find out the status of their Cash ISA deposit.

Interest Rates 2016

So whilst 2.3% may be the best current rate for ISA savers, however a year from now, and despite the continuing Bank of England Funding for Lending scam/scheme, then similar best Cash ISA interest rates should be at least 0.7% higher. However, I will come back to the prospects for UK interest rates for 2016 in much greater detail in the coming weeks so ensure you are subscribed to my always FREE newsletter to get this in your email in box. The bottom line is to think hard and long before fixing for multiple years today, which means take early exit penalties into account as an important factor.

Source and Comments: http://www.marketoracle.co.uk/Article50832.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2015 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in