Interest? What Interest?

graph showing twenty years of base rate changesChoosing what is the best investment has become a whole lot harder since interest rates tumbled.  Now, most savers are on the look out for higher interest rates.  FundingKnight blogger Mark Harrison reflects on how at least one thing – the research process for finding the best savings and investments – has improved.

 

Getting at information has become a lot easier over my lifetime.

When I was a lad, there were two building societies on the local high street, and if you went in, you could queue up and discover what interest they paid.

At some point over the intervening years, the banks and building societies decided that they should ‘big it up’ a bit more, and started advertising their interest rates in their windows. (Of course, a lot of the building societies had turned into banks, but that’s another thought for another day.)

Now, if I walk around my local shopping centre, I see big numbers.

Well, big placards anyway.

The numbers themselves are small.

The Internet, of course, has really transformed information gathering. When I wanted to find out what the best interest rate on a deposit account was, I didn’t go down and look at the placards – I went to Google, which pointed me to http://www.money.co.uk/savings-accounts/all-savings-accounts.htm

According to them, the best rate I could get on my savings would be 4.7%. To do that, I’d need to head off to Scottish Widows Bank and commit my money for 5 years. Oh, and I’d have to pony up a minimum of £10,000.

If I was prepared to tie up my money for ‘only’ 3 years, the best I could do would be 4%. And at 2 years that comes down to 3.75%.

Whether you’re trying to build up savings for a future retirement (or, a rainy day), or actually trying to live on savings, the future is looking bleak.

To become a lender with FundingKnight, you don’t need £10,000 – you can start with as little as £500.

It’s not like a bank account, though – because you’re not paying for the huge infrastructure that high street banks spend billions maintaining – instead, you’re lending directly to British businesses. That’s why we’re able to offer our borrowers lower rates than the banks – but still ensure our lenders get rather more than 3.75%

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One thought on “Interest? What Interest?

  1. Pingback: P2P lending becomes a hot topic for conversation | FundingKnight: The Blog

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