Negative rates haunt Virgin Money, bank investors

Worsening outlook

The BoE’s August Monetary Report notes if rates turn negative then deposit-taking institutions probably can’t take deposit rates below zero in response as customers would hoard physical cash.

As a result, the profit margins the banks make on the spreads between lending and deposit rates could narrow the most yet in the current rate-cutting cycle.

Virgin Money’s net interest margin in the UK fell 16 basis points over the June quarter to just 1.47 per cent.

Broker Bell Potter cut its valuation on the bank 10 per cent to $1.80, suggesting if UK cash rates go lower then it’ll struggle to reprice its savings rates offered to depositors.

Banks most reliant on retail deposits for funding are the most exposed to negative rates, according to the BoE. Bell Potter reported 79 per cent of Virgin Money’s funding came from retail deposits in the second half of financial 2020.

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Bank FD interest rates are falling. Where should I invest for 1-2 years?

I am 34 years old. I am a teacher by profession. I put my surplus money in bank FDs. Recently, the banks have cut interest rates for one year FDs to around 5%. As far as I understand, this much return will not even beat inflation. I looked at the returns of liquid funds which were also not great. Please suggest which is the best investment option to invest my money for around 1 to 2 years? I fall in the 10% tax bracket.

-Sunita KL

By Prashant Maurya, Partner, Citrine Financial Advisors

As we are in a soft interest rate regime environment so interest from Fixed Deposits and similar instruments have gone down in the last one year.You can opt for Low Duration, Short Term and Banking PSU mutual funds. Returns will be at par or slightly higher than Bank Fixed Deposit. If there is some more softening

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Capital One CD rates

Capital One offers a number of CDs with varying terms that can help you meet your savings goals. You’ll find its rates are competitive and you won’t have to worry about any minimum deposits.



a man sitting in front of a building: A young man researches outside.


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A young man researches outside.

Keep in mind that if you open a CD with Capital One, you won’t be able to make any additional deposits. Once your CD reaches maturity, however, you can choose to deposit more money, withdraw the funds or renew your account.

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Capital One earned 4.7 out of 5 stars in Bankrate’s review across its deposit products.

Capital One CD rates

Here’s a brief overview of Capital One’s CD rates.

Account name Term APY Minimum deposit
Capital One 360 CD 6 months 0.25% no minimum
Capital One 360 CD 9 months 0.30% no minimum
Capital One 360 CD 12 months 0.50% no minimum
Capital One 360 CD 18
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The Lowdown on Capital Gains Tax Rates for 2020 and Beyond

Selling taxable investments held for more than a year has tax implications. Long-term gains from the sale of stocks, mutual funds and other capital assets are taxed favorably at 0%, 15% or 20% compared with the top 37% tax rate on ordinary income. 



a person using a laptop computer sitting on top of a table


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These rates for long-term capital gains are based on set income thresholds that are adjusted annually for inflation. For 2020, the 0% rate applies to taxable income of up to $40,000 on single returns, $53,600 for head-of-household filers and $80,000 for joint filers. The 20% rate starts at $441,451 for single filers, $469,051 for heads of household and $496,601 for joint filers. The 15% rate is for taxable incomes between the 0% and 20% break points. These rates also apply to qualified dividends. Short-term gains from the sale of assets held for a year or less are taxed at ordinary income rates.

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Bank of Korea to Hold Rates, Cut GDP View: Decision Guide

(Bloomberg) — The Bank of Korea is expected to hold its policy rate at a record low on Thursday while slashing growth projections as a resurgence of the coronavirus throws recovery prospects into disarray.

All 22 analysts surveyed by Bloomberg expect the seven-day repurchase rate to remain at 0.5%, a level Governor Lee Ju-yeol has said is close to the effective lower bound. Lee this week told lawmakers the bank may cut its economic projections for 2020 by a considerable margin after forecasting a 0.2% contraction in May.



a screenshot of a cell phone: As 2020 GDP forecasts slide, pressure mounts on BOK to do more


© Bloomberg
As 2020 GDP forecasts slide, pressure mounts on BOK to do more

With little question among analysts that the BOK will stand pat on rates, the focus shifts to how significantly the bank cuts its view of this year’s growth, said economist Park Jeong-woo at Nomura Holdings Inc.

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“Anything below -1% and people will take that to mean

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4 tips for bagging one of those mortgage rates under 3%

You’ve seen the headlines: With the economy in a COVID-19 tailspin, mortgage rates that have been falling and falling have now reached depths below 3% for a 30-year loan.

The national average rate dropped earlier this month to an all-time low 2.98%, according to mortgage giant Freddie Mac, which has been tracking rates since 1971. On Thursday, Mortgage News Daily reported that the average sank to an even more jaw-dropping 2.87%.

But if you’re a homeowner wanting to refinance or a homebuyer ready to make a purchase, you can’t assume that a mortgage lender will always give you one of those spectacularly low rates.

In some cities, different lenders can offer rates that vary by close to one full percentage point, a recent study from LendingTree found.

In other words, Lender X might want to give you a 30-year fixed-rate mortgage at 3.9%. But you might discover that Lender Y

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This is how you get one of those mortgage rates under 3%

You’ve seen the headlines: With the economy in a COVID-19 tailspin, mortgage rates that have been falling and falling have now reached depths below 3% for a 30-year loan.

The national average rate dropped earlier this month to an all-time low 2.98%, according to mortgage giant Freddie Mac, which has been tracking rates since 1971. On Thursday, Mortgage News Daily reported that the average sank to an even more jaw-dropping 2.87%.

But if you’re a homeowner wanting to refinance or a homebuyer ready to make a purchase, you can’t assume that a mortgage lender will always give you one of those spectacularly low rates.

In some cities, different lenders can offer rates that vary by close to one full percentage point, a recent study from LendingTree found.

In other words, Lender X might want to give you a 30-year fixed-rate mortgage at 3.9%. But you might discover that Lender Y

Read More

With mortgage rates now under 3%, most home loans are due for a refinance, study says

Few people ever expected to see mortgage rates slide so low, and many homeowners have been caught off guard. Thirty-year fixed-rate mortgages are now averaging less than 3% in multiple surveys — and are offering major refinance savings.

Though mortgage holders have been flocking to get new loans with sharply reduced interest rates, plenty of homeowners are still sitting on mortgages that are now too expensive.

In fact, a new report from mortgage company Fannie Mae says most mortgages with outstanding balances should be refinanced. Maybe that includes yours.

If you have a mortgage that’s closer to 4% than 3%, your monthly mortgage payment is probably hundreds of dollars higher than it could be.

Who needs to refinance?

Roschetzky Photography / Shutterstock

An estimated 60% of homeowners with mortgages can chop down their interest rates by at least one-half of one percentage point by refinancing, Fannie Mae says.

“The

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With rates under 3%, most mortgages are due for a refinance, study says

Few people ever expected to see mortgage rates slide so low, and many homeowners have been caught off guard. Thirty-year fixed-rate mortgages are now averaging less than 3% in multiple surveys — and are offering major refinance savings.

Though mortgage holders have been flocking to get new loans with sharply reduced interest rates, plenty of homeowners are still sitting on mortgages that are now too expensive.

In fact, a new report from mortgage company Fannie Mae says most mortgages with outstanding balances should be refinanced. Maybe that includes yours.

If you have a mortgage that’s closer to 4% than 3%, your monthly mortgage payment is probably hundreds of dollars higher than it could be.

Who needs to refinance?

Roschetzky Photography / Shutterstock

An estimated 60% of homeowners with mortgages can chop down their interest rates by at least one-half of one percentage point by refinancing, Fannie Mae says.

“The

Read More

With rates under 3%, most mortgages should be refinanced, study says

Few people ever expected to see mortgage rates slide so low, and many homeowners have been caught off guard. Thirty-year fixed-rate mortgages are now averaging less than 3% in multiple surveys — and are offering major refinance savings.

Though mortgage holders have been flocking to get new loans with sharply reduced interest rates, plenty of homeowners are still sitting on mortgages that are now too expensive.

In fact, a new report from mortgage company Fannie Mae says most mortgages with outstanding balances should be refinanced. Maybe that includes yours.

If you have a mortgage that’s closer to 4% than 3%, your monthly mortgage payment is probably hundreds of dollars higher than it could be.

Who needs to refinance?

Roschetzky Photography / Shutterstock

An estimated 60% of homeowners with mortgages can chop down their interest rates by at least one-half of one percentage point by refinancing, Fannie Mae says.

“The

Read More