Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Investing in the Tulip Crypto Mania 2021 - 19th Jun 21
Here’s Why Historic US Housing Market Boom Can Continue - 19th Jun 21
Cryptos: What the "Bizarre" World of Non-Fungible Tokens May Be Signaling - 19th Jun 21
Hyperinflationary Expectations: Reflections on Cryptocurrency and the Markets - 19th Jun 21
Gold Prices Investors beat Central Banks and Jewelry, as having the most Impact - 18th Jun 21
Has the Dust Settled After Fed Day? Not Just Yet - 18th Jun 21
Gold Asks: Will the Economic Boom Continue? - 18th Jun 21
STABLE COINS PONZI Crypto SCAM WARNING! Iron Titan CRASH to ZERO! Exit USDT While You Can! - 18th Jun 21
FOMC Surprise Takeaways - 18th Jun 21
Youtube Upload Stuck at 0% QUICK FIXES Solutions Tutorial - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations Video - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction - 17th Jun 21
Stocks, Gold, Silver Markets Inflation Tipping Point - 17th Jun 21
Letting Yourself Relax with Activities That You Might Not Have Considered - 17th Jun 21
RAMPANT MONEY PRINTING INFLATION BIG PICTURE! - 16th Jun 21
The Federal Reserve and Inflation - 16th Jun 21
Inflation Soars 5%! Will Gold Skyrocket? - 16th Jun 21
Stock Market Sentiment Speaks: Inflation Is For Fools - 16th Jun 21
Four News Events That Could Drive Gold Bullion Demand - 16th Jun 21
5 ways that crypto is changing the face of online casinos - 16th Jun 21
Transitory Inflation Debate - 15th Jun 21
USDX: The Cleanest Shirt Among the Dirty Laundry - 15th Jun 21
Inflation and Stock Market SPX Record Highs. PPI, FOMC Meeting in Focus - 15th Jun 21
Stock Market SPX 4310 Right Around the Corner! - 15th Jun 21
AI Stocks Strength vs Weakness - Why Selling Google or Facebook is a Big Mistake! - 14th Jun 21
The Bitcoin Crime Wave Hits - 14th Jun 21
Gold Time for Consolidation and Lower Volatility - 14th Jun 21
More Banks & Investors Are NOT Believing Fed Propaganda - 14th Jun 21
Market Inflation Bets – Squaring or Not - 14th Jun 21
Is Gold Really an Inflation Hedge? - 14th Jun 21
The FED Holds the Market. How Long Will It Last? - 14th Jun 21
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 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