Interest rates terrible now when saving for house

Interest rates have been steadily falling over the past few years. Seems to have hit new lows lately.

Barely any incentive to save it would seem. Most banks paying below 2% annually these days and then DIRT 41% comes off…

Even my Credit Union, which paid 2% dividend last few years, have capped the amount of deposits you can have!

it’s almost as if the ECB don’t want people to save money :angry:

I’ve said it before: when it’s obvious they don’t want you to save, that’s exactly what you should do*.

*** warning: may cause a Great Depression**

That is exactly what is happening, savers are pushed into spending their money or investing elsewhere.

This of course does not help someone trying to save for a house as not only do they have to compete against other families in same position but property investors trying to earn higher interest on their money.

In the past inflation would have resulted but it is nowhere to be seen (except house prices which are conveniently excluded from inflation measures)

Interesting times we live in…

When returns are good, save a lot to take advantage. When returns are bad, save more to compensate. :smiley:

Not an economist, but isn’t inflation significant in this?

Some deposit interest offsets inflation, preserving the relative value of savings over time. So 2% interest at ~0% inflation is approximately the same as 4% interest with 2% inflation and so on. It would be interesting to see a graph of (interest - inflation) over time, to see how consistent this rate is.

All rather moot when housing “inflation” which is excluded from official figures is 10-20% up a year

look up: “real interest rates

(“real” prefixed to anything in finance typically means it’s been adjusted for inflation)

Thanks!