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Comment by trq_ | Hacker News Reader

I guess I'm a bit naive, why is this?

Interest rates for banking accounts for quite some time have been low. 3% is very high for the USA so it' s a pleasant surprise for many people.

Also 3% is astronomical for Euro zone. Here you typically have 0.01-0.1% on saving accounts (only for 100k Euro and below), and negative rate on checking accounts (most people usually pay 7-12 Euro per month for checking accounts and 20-40 Euro per year for Visa card).

...which is appropriate when "risk-free" government bonds hover near zero percent.

The US 10-year is on the other hand is near 3%.

It's not a fair comparison. Interest rates have bounced back (to some extent) and interchange fees are quite a bit higher in the US.

I haven't checked everywhere in the eurozone but a lot of major banks have online brands/products that are typically free. You should be able to have at least a checking account and a debit card without paying any fees. "Neobanks" are also a lot more developed than in the US: see N26, Revolut, Ferratum, ...

Savings accounts yield nothing, but that has nothing to do with retail banks :) That said, you can find fixed-term deposits between 1 and 2%: https://www.raisin.com/

You can get around 0.8% in Euro zone, but your local bank is unlikely to offer that.

There's a slew of online-only banks out there currently offering accounts with around 2% interest. Banks that have a brick-and-mortar presence have a lower margin so they offer lower interest rates.

My checking / current account pays less than 1% and that's only on the first £2500 (I think), after that the interest is zero.

I'd love a checking account, with no fees that pays 3% on the whole balance.

My average balance on my current account is around £20k. My interest would be £600 a year at 3%, as opposed to £25 or so I get now.

What's stopping you from opening up similar accounts with other banks?

They don't exist

Most banks that will give you a current account will want to see £xxxx deposited every month (e.g, your salary) to earn any interest (if they even offer interest, it's rare on a current account).

I could open multiple, but then every month I'd need to spend time transfering money to each to earn the interest. Im not sure that would even count towards deposited every month, they might want to see a direct debit that is actually a salary. I'm not sure.

Further, I have an ISA (which is the UK tax free saving accont), that earns under 1% too and I'm limited to £20k a year into that account.

I have another account that pays ~2.x% per year, but on that one I'm limited to £250 a month.

Interest rates are abysmal right now in the UK.

The time isn't an issue - you can set up standing orders yourself with most UK online banking sites. If they require a direct debit that's another matter.

You can use something like https://littledebits.co.uk/Direct-Debits-and-Charity small cost to you, but probably worth it if you're getting sufficient return.

> Im not sure that would even count towards deposited every month, they might want to see a direct debit that is actually a salary. I'm not sure.

For what it's worth, here in Australia they have similar offers. At one bank, I said I wasn't interested because of the regular 'salary' deposit requirement, and that bank offered to set me up with two accounts and a regular automated transfer between them to meet the minimum monthly deposit requirement. Though honestly, the fact they offered to do that concerned me even more.

As you say there's a few current accounts that will give you decent rates on smaller amounts but you'll have to set up the minimum pay-ins as standing orders (which works on almost all of them, I've had a fair few). You can also do the whole switching-for-bonuses thing which is much easier than it used to be and will give you an OK return but is more work than most people are willing to put in.

However, if you're looking for something slightly better than what you've got now there are currently a fair few 1.5%ish easy access accounts available that you could just dump your savings in and make a fair bit more than you're currently getting. You can get 2-3% if you're willing to lock some up for a year+.

ISAs are irrelevant for most people since the personal savings allowance came in - if you're earning less than £500/£1000 per year in interest (depending on income) then you won't pay tax anyway.

moneysavingexpert.com has excellent round ups of this sort of thing.

As a mortgage payer with no residual income "interests rates are fantastic in the UK right now", any reason I'm wrong it that framing?

1.4 is about the best easy access cash ISA at the moment -BTW for non UK types you don't pay interest on any income in an ISA.

> I could open multiple, but then every month I'd need to spend time transfering money to each to earn the interest.

This is a 30 second job setting up a free ongoing standing order, one to deposit then one to move the money elsewhere the day after every month automatically. This is sufficient to meet the pay-in requirements of all the banks.

> they might want to see a direct debit that is actually a salary

Salaries aren't paid by direct debit, that's something else - an agreement that allows a company to withdraw a variable amount from your account. Some banks have a requirement that you have x direct debits setup (normally 1 or 2), you can work around that with something like https://littledebits.co.uk/Direct-Debits-and-Charity

Cash ISAs serve minimal purpose with the new personal savings allowances. If you're a higher rate tax payer you get £500 tax free, £1000 if you're a lower rate cash payer. I'd question why you're holding so much cash if you're getting a return higher than that, there's often better places for your money.

Check https://www.bankaccountsavings.co.uk/

Some workplaces can split your direct deposit from payroll into multiple accounts. _If_ you can hit the deposit limits that way. The bank doesn't need to know it is not your entire salary.

Unless your monthly turnover is massive you could probably afford to lock some of that away for a year and get higher interest rates.

Or look into an offset mortgage.

Even bog standard instant access accounts are above that, and have the added benefit of not potentially losing all your money when you debit card gets nicked.

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