Savings interest rate thread

[981Boxess]

ferret50 said:

Who are those FRB's with, please?

All different providers, but average going rates for each term.

[Teatowell]

981Boxess said:

Looking at FRBs currently on offer the going rates in round numbers are as follows:

1yr - 5.25
2yr - 5.06
3yr - 4.81
4yr - 4.35
5yr - 4.60

Could you shed any light why the 4 year FRBs are always out of step with 1,2,3 & 5 year FRBs, this is not just now, it has been like this for some time now - any idea why?

Very unpopular term. 4yr swap is broadly the midpoint between 3 and 5yr so there’s no difference in economics but it’s just straight unpopular. Most will take 3 or 5 if looking for a longer term and so not many providers offer meaning the gap.

[minimods]

bmwmike said:

Getting around 5.3 on a money market fund via vanguard if anyone likes a punt

That doesn't include the OCF and platform fees though? So would be lower in reality, but still a good safe rate if your keeping cash on the side.

[981Boxess]

Teatowell said:

Very unpopular term. 4yr swap is broadly the midpoint between 3 and 5yr so there’s no difference in economics but it’s just straight unpopular. Most will take 3 or 5 if looking for a longer term and so not many providers offer meaning the gap.

A bit of a chicken/egg situation, savers follow rates, if they don’t offer the rates they won’t get the savers.

[Teatowell]

981Boxess said:

A bit of a chicken/egg situation, savers follow rates, if they don’t offer the rates they won’t get the savers.

Regardless the term doesn’t get the exposure so even pricing into that space doesn’t yield any meaningful balance based on my experience.

For the same reasons you do not see 4yr Mortgages. Perhaps some psychological reasoning but if you’re going long term you jump from 3 to 5 even to 10.