Where You Should Put Your Hard Earned Savings Now
If you invested money like me since '83 (not), you've probably noticed being hit hard with the recently announced shockingly low interest rates. Especially if you, like me, got a variable savings account, just because it sounded better than the concept of a fixed one.
The only variable for me now are my emotions, as the rate cut by the Bank of England has put the base rate at 2 per cent, its lowest level in over 50 years, hoping to stimulate the economy. But according to Times Online, last month the Bank expected the economy to shrink next year by 1.3 per cent, which would be the worst economic performance since the recession of the early 1990s. The men in suits have admitted that conditions have grown worse since last month’s projections. Economists are already forecasting that the base rate could fall further, going as far to saying that even a zero per cent base interest rate may be a real possibility.
Hitting the lowest levels since '51, the Bank’s current projections paint a worse picture now than they did a month ago, with manufacturing and consumer spending declining as rapidly as they are and savers watching the return on their money plummet. Natwest's shitty 0.1% interest on your 30 day bonus reserve savings account isn't going to help much of your £2k saved up before today. And Nationwide's 0.8% interest on balances under £10k on a 90 day notice account called the 'CapitalBuilder' is a somewhat ironic name.
Question is, is there anything you can do to protect your savings and money? Here's our thoughts at Bitterwallet (and we would love to hear yours):
1. The high street bank does not have your saving interest at heart. There are still good deals to be found, but you must move quicker than bugs bunny before these too disappear from the market. So it's time to admit to the true identity of the shameless haggler that you are. Make sure you are shopping around and comparing deals.
3. If you plan to stick around for a little while and can afford to tie up your cash more than a year, consider a fixed-rate account, if you can negotiate a decent rate.
4. If you owe money on credit cards, or to the guys in sunnies and leather jackets down the road threatening to burn your house down by next Friday, now may be a good time to pay off the debt with the low interest rates. Then again, not like selling the house will help much, either.
5. If all else fails... it's time for all of us to put on our sunnies. Pack our bags. Leave the country. Make sure to haggle for a good currency exchange rate. Move down to South America, dance a little siesta, drink a little wine, and make a little love. That's what I plan to do (except the latter, which I plan to have plenty of).
Anyway let's hear any other suggestions, tips and thoughts you may have. No posts about Secret Santa filling our bank accounts with millions allowed.