Daily Grind Of Still Water

Demand is high for good nurseries and child minders.Source: Daycare TrustAdditional research by Nicola CappinFor the free guide, ‘Choose a Nanny’, published by the Department for Education and Skills, call 020 7270 5000. The Daycare Trust’s hotline provides free information and advice and is open Monday to Friday, 10am to 5pm; call 020 7840 3350. For details on the Childcare Information Service, contact Childcare Link on 0800 096 0296 or The National Childminding Association can be contacted at 8 Masons Hill, Bromley, Kent BR2 9EY, or .uk. One of the main problems with attractive headline rates on bank accounts, credit cards and mini cash individual savings accounts is that once new customers have been lured in, the rates inevitably drop off dramatically. MoneynetsavingssearchOne of the main problems with attractive headline rates on bank accounts, credit cards and mini cash individual savings accounts is that once new customers have been lured in, the rates inevitably drop off dramatically. The result is that these people end up with uncompetitive rates of interest and at the same time can’t be bothered to switch accounts again so soon.
But Zurich Financial Services is attempting to solve this problem with last week’s launch of its new online bank. The interest on the account offered by Zurich Bank, a joint venture between the financial group and Bank of Scotland, will track the Bank of England base rate at 0.5 per cent below – currently giving a payable rate of 3.5 per cent on balances of £1 and upwards.

This is guaranteed for the lifetime of the account.”Customers are often led to believe they have secured a high interest rate only to see it eroded over time to become much less attractive,” says Chris Gillies, managing director of Zurich Bank. “By tracking the Bank of England base rate, Zurich offers a permanently competitive interest rate for the life of the account, with no need to keep checking for the effect of changes.”Zurich Bank customers will also get an automatic £250 fee-free overdraft facility and authorised overdraft rates guaranteed to track at 5 per cent above the base rate, which currently works out at 9 per cent.Customers can choose whether to use their account as a savings or current account, or both. And if you need to contact the bank, you are not stuck with unreliable email: a 24-hour telephone back-up system will operate. Zurich Bank intends to offer mortgages, loans and other products and services in the future.Egg, the internet bank owned by Prudential, has been particularly guilty of cutting excellent headline rates by bigger margins than the base rate in recent months. Savers have seen interest cut by 0.5 per cent this month, the second reduction since November.

Even though the Egg Standard Account has been a top payer since its launch as a telephone, postal and internet account in 1998, its guarantee to match the base rate expired at the beginning of this year, and savers have been hard hit because of that.They now earn just 3 per cent before tax, meaning they have suffered a 1.5 per cent rate cut since August last year, compared with a 1 per cent cut in the base rate.When choosing an account, it is worth opting for one of those guaranteed to track the base rate. That means that no matter what interest rates do, your account will reflect them. And with rates at a 40-year low, savers need to look more carefully for accounts that safeguard their income, thereby softening the blow to a certain extent.Abbey National, which last month launched a current account paying 3 per cent interest on balances in credit, refuses to guarantee that it will not cut rates at some point in the future. Perhaps it is bearing in mind the example of the Halifax: during its campaign to pull in new customers, the bank offered 4 per cent interest on balances on its current account. But this dropped by a half once 300,000 customers had switched to the account, admittedly in an environment of falling rates.However, Halifax does offer a guaranteed reserve account and is increasing the interest paid on it – along with its fixed-rate web saver account and stepped-income reserve account – by up to 1.75 per cent.Northern Rock has also increased the interest on its fixed-rate accounts, as have several building societies, such as Norwich & Peterborough and Scarborough Other high-street banks are expected to follow suit. Moneynet Investing in shares is exciting most of the time, a bit like gambling, though with better odds than the lottery But then, every few years, it all goes wrong. A bear market takes hold, stock markets slowly drift up and down, and suddenly investing becomes rather dull.

Good companies are ignored and bad companies punished, while nothing advances with any conviction. If it wasn’t for the laughably low interest rates on savings accounts, we’d probably just stick to cash and wait till the market showed signs of life.So what does a share club do when things get boring? Carry on holding 50 per cent of assets in cash, or do something brave or even plain stupid like buying shares in humbled technology stocks?
An alternative is to diversify our investments. This is based on a medium-term strategy for managing both risk and reward, using the simple idea that different classes of asset carry greater risks and rewards, as well as varying levels of income. In line with most fund managers, we aim to build up a three-part portfolio structure comprising shares (high risk, high reward), bonds and gilts (much lower risk and guaranteed income), and cash (low risk, zero reward). This classic diversification model will be our battle plan for the next two years, laid out as a series of asset categories with funds allocated to each proportionately.We have five main categories: cash; corporate bonds; government securities (gilts); and two share-based categories, high-yield, high-dividend stocks and high-risk, high-growth stocks.We split the shares into two categories with precise criteria. The high-yield portfolio is chiefly made up of companies paying a dividend yield of between 3.5 and 10 per cent per annum. But we also want high-yield companies with growth prospects and a solid balance sheet, which means excluding those with huge levels of debt – more than 50 per cent of their value – and those that don’t earn at least twice the dividend payout in profits.