Neat trick - bank interest

I got the same email yesterday and logged on to add it to my account. This morning I had an email confirming that the bonus had been applied.

Unless you have a *lot* of money invested does it make a difference worth bothering about?

Gosh, I keep so little money in my bank account...because I need at least 20%.

Why on earth would you bother with 0.1%? That's about a quid a year on my balance

It happens that The Natural Philosopher formulated :

It involves rather more, for me.

Chris Green brought next idea :

Whatever the amount, the money is better in your pocket, than theirs.

What would be the reason for that subterfuge? Are you sure its not some scammer? Brian

Somebody in a shiny glass office somewhere will get a bonus for increasing "Customer Engagement".

Then what is it doing in a bank?

Even the most ill managed of funds should net you a couple of percent. Even 1914 war bonds paid more.

Because the 0.1% is a special offer valid for one year only. After 12 months you will have to take action to renew it - which some will either forget or not bother to do.

Brian Gaff (Sofa) formulated on Saturday :

No, not a scam - I use my own link to the site to log in. The reason is that many will ignore or overlook the offer of extra interest, so they don't then have to pay it. Makes a change for rates to rise..

Minus inflation, so rather LESS actually.

Even 10 year gilts now yield 0.75%

They are making far more out of your money than you are.

It is a savings account, not a current account. Certainly worth a couple of minutes to take advantage of the extra.

What no-risk scheme should we look at then?

Chris

If you think a bank savings account is no risk, you simply don't understand banks.

They are underwritten by government, so you are assuming government is no risk.

So why not invest in a bond fund?

Spread the risks wider than your own government..

It will go up and down, but the fund managers job is to make sure it goes up in the long term and to make sure it goes up more than other fund managers.

at the risk of some major unforeseen catastrophic world event wiping 30% off your funds in a blink

that's a risk some people don't want to take

what bonds were paying as a "new" issue is irrelevant as you can't buy them new once the issue is closed

and when buying them in the market the price of bonds fluctuates to reflect the prevailing interest rates at the time of purchase (taking into account the encashment date).

well of course we have to

not doing so would be stupid

We rely upon government for what, 50%?, of our daily well being. If government collapsed the average MITS would see a far greater loss to his lifestyle than the loss of his savings - he's see, for example, a shortage of food to put on his table. Not because he doesn't have the money to buy it, but because the shops don't have any to sell to him.

And yes it happens - in tin pot dictatorships. But not in mature economies (even ones some argue is badly run).

So yes, sitting where we do sit, it's a risk we can exclude.

and a fair risk of capital loss, otherwise it wouldn't be paying 2.7%

That's how finance works

for the reason the OP speculated about

because a sizable percentage of people don't take up the offer

It's exactly the same with "cash back" offers on tech products

a very sizable percentage of people do not jump the hoops to collect the money