Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Friday Stock Market CRASH Following Israel Attack on Iranian Nuclear Facilities - 19th Apr 24
All Measures to Combat Global Warming Are Smoke and Mirrors! - 18th Apr 24
Cisco Then vs. Nvidia Now - 18th Apr 24
Is the Biden Administration Trying To Destroy the Dollar? - 18th Apr 24
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

UK Fixed Bond Savings Interest Rates Fall Through the Floor

Personal_Finance / Saving Bonds Mar 01, 2016 - 04:28 PM GMT

By: MoneyFacts

Personal_Finance

As far as the savings market was concerned, 2015 was the year of the challenger provider, and as a result rates crept up and positivity started to make a welcome return. However, research from Moneyfacts.co.uk shows that since the start of the year rates on fixed bonds have free-wheeled downhill to new lows.


Charlotte Nelson, Finance Expert at Moneyfacts.co.uk, said:        

“It’s been a winter of discontent for savers - fixed rate bonds have once again plummeted to record lows and there are currently no signs of an end to this downward path. Fixed rate bonds are often looked to as the best place to get a decent interest rate, and given that rates were starting to creep upwards last year, this new turn of events is extremely disappointing.

Moneyfacts.co.uk recorded a staggering 222 rate cuts to fixed bonds in the first two months of 2016 with the highest reduction being a whopping 0.74%. As a result, it’s unsurprising that many are beginning to think that these cuts will never end.

“The newer entrants to the savings market in 2015 kick-started some competition as each fought to win pole position in the Best Buy tables, particularly in the fixed market. However, this competitive spirit was short-lived, with competition beginning to ebb now that the newcomers have begun to establish themselves. This is, in part, due to oversubscription of these highly attractive deals, which has prompted the new brands to reduce their offers. Besides, with other rates in the market in freefall, the challenger banks need only to offer a reasonable return to ensure they stay in top position.

“Essentially, this boils down to the failure of the main banks to compete with the new players and boost competition and rates. The challengers make up only a small portion of the market, so their positive impact on the market was always going to be fleeting if the main players didn’t get on board.

“The fall in SWAP rates has also had a negative impact on the fixed bond sector. A drop in these rates means that it is now cheaper for providers to fund their mortgage book, which in turn has led to a drop in longer-term investment rates as providers have less need for savers’ funds.

“With a base rate rise now seeming to have been put out to pasture for the time being, savers inevitably feel as though they are caught in a downward spiral of misery. However, with April bringing the new Personal Savings Allowance, now is a great time for savers to re-evaluate their savings pot to try and get the best returns they can.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


© 2005-2022 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