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TomsFocus

Banking Interest Rates

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I'm getting confused with banks interest rates atm, someone on here must be good with money!  I currently have a small amount of savings getting a measly 1%, and a current account getting no interest at all.

I saw the First Direct 2.75% savings account and looked into it, but because you can only pay £300 a month into it, it works out as only about 1.2% by the end of the year!  Not worth moving the money from the 1% account for that!  Can't find anything better either... 

So I've also seen the free TSB current account that currently offers 3% (but drops to 1.5% soon).  But I'm struggling to work out the actual interest figure with it being a current account.  How do I go about that?  The majority of the money that goes in during the month, comes out at the start of the next one.  I don't have much income but trying to work out whether it's worth going for a current account with interest or not...if it's like 50p a month then obviously not worth the hassle! 

 

 

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Most high interest accounts I've seen require you to leave the money in. So my natwest is 1.5% up to £5,000 then 1% up to £10,000. I have to put £50 a month in to get that interest rate. However, if I make a withdrawal then I will lose the interest for that month.

Interest rates suck atm. The only way to get anything higher than I think 1.8% is to go with a long term ISA that you can't touch for 2 years or something.

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1 minute ago, Luke4efc said:

Most high interest accounts I've seen require you to leave the money in. So my natwest is 1.5% up to £5,000 then 1% up to £10,000. I have to put £50 a month in to get that interest rate. However, if I make a withdrawal then I will lose the interest for that month.

Interest rates suck atm. The only way to get anything higher than I think 1.8% is to go with a long term ISA that you can't touch for 2 years or something.

Those sound like savings accounts, I've realised those are all pretty poor atm! 

It's the TSB Plus current account that I'm interested in.  Need to pay in £500 a month...but seeing as my rent costs that much I'll be up the creek if there isn't at least that amount going in! :laugh:  Also need to have 2 direct debits - don't think standing orders count but TV licence & water are definitely direct debit.  Apart from that, I can't see any other requirements like leaving a certain amount in?   In fact, it says balances 'up to' £1500 so they obviously don't want much in left there... :g:

https://www.tsb.co.uk/current-accounts/classic-plus-account/?WT.mc_id=43700040408339913&WT.srch=1&keyword=tsb plus account&matchtype=e&adid=325753146221&cmp=PCA_CLASSIC-PLUS-ACCOUNT_B_EXACT_X&agrp=B_CLASSIC-PLUS-ACCOUNT_X_CORE_EXACT&eact=GOOGLE&ch=ppc&sch=brand&pf=pca&co=acq&ds_rl=1276281&ds_rl=1276281&gclid=Cj0KCQiAv8PyBRDMARIsAFo4wK12WY9SL-fKqfe_9LK7oYhfnxhG9BPC9OjqN8O8EKMf-9eY0KoSU8MaAliqEALw_wcB&gclsrc=aw.ds

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2 hours ago, TomsFocus said:

Those sound like savings accounts, I've realised those are all pretty poor atm! 

It's the TSB Plus current account that I'm interested in.  Need to pay in £500 a month...but seeing as my rent costs that much I'll be up the creek if there isn't at least that amount going in! :laugh:  Also need to have 2 direct debits - don't think standing orders count but TV licence & water are definitely direct debit.  Apart from that, I can't see any other requirements like leaving a certain amount in?   In fact, it says balances 'up to' £1500 so they obviously don't want much in left there... :g:

https://www.tsb.co.uk/current-accounts/classic-plus-account/?WT.mc_id=43700040408339913&WT.srch=1&keyword=tsb plus account&matchtype=e&adid=325753146221&cmp=PCA_CLASSIC-PLUS-ACCOUNT_B_EXACT_X&agrp=B_CLASSIC-PLUS-ACCOUNT_X_CORE_EXACT&eact=GOOGLE&ch=ppc&sch=brand&pf=pca&co=acq&ds_rl=1276281&ds_rl=1276281&gclid=Cj0KCQiAv8PyBRDMARIsAFo4wK12WY9SL-fKqfe_9LK7oYhfnxhG9BPC9OjqN8O8EKMf-9eY0KoSU8MaAliqEALw_wcB&gclsrc=aw.ds

Two quick tips I can think of for you:

1) I believe you can possibly setup a peppercorn direct debit to a charity (say 1 or 2 quid a month) to help you qualify for the direct debit criteria for the account (read T&Cs to be sure)

2) There are a lot of offers for switching current accounts, some banks give around 100 quid cash, might be worth investigating these?

Yes interest rates suck at the moment, you really have to have a lot of money in a savings account (e.g. at least 50k) to get even a small return (62.5 quid a month @ 1.5%, for the 50k example)

I believe HSBC used to have a monthly saver account where you pay in 250 each month, and get between 3-5% interest back at the end of the year upon maturity. If you can afford to save that much, might be worth investigating. There's also those comparison websites (e.g. comparethemarket) for savings accounts and current accounts, check that out too. 

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13 minutes ago, Incontro said:

Two quick tips I can think of for you:

1) I believe you can possibly setup a peppercorn direct debit to a charity (say 1 or 2 quid a month) to help you qualify for the direct debit criteria for the account (read T&Cs to be sure)

2) There are a lot of offers for switching current accounts, some banks give around 100 quid cash, might be worth investigating these?

Yes interest rates suck at the moment, you really have to have a lot of money in a savings account (e.g. at least 50k) to get even a small return (62.5 quid a month @ 1.5%, for the 50k example)

I believe HSBC used to have a monthly saver account where you pay in 250 each month, and get between 3-5% interest back at the end of the year upon maturity. If you can afford to save that much, might be worth investigating. There's also those comparison websites (e.g. comparethemarket) for savings accounts and current accounts, check that out too. 

1) I already have 2 direct debits so that's not an issue.

2) Yeah, TSB are one of those offering a switching bonus if recommended by a friend...I don't have any of those so if any of you guys have a TSB account... :wink: 

Nationwide did a 5% saver last year, £250 a month, but have now dropped it as it 'wasn't hitting the target market'.  Apparently, too many rich people were opening the account to receive £50 back after 12 months...as if they'd bother! :laugh:  It's that account that has now matured and I wanted to move elsewhere but savings accounts interest rates are all poor now, unless you can afford to pay in large amounts each month.  I'm genuinely surprised no-one on here has a current account getting interest now...maybe they're just not that well known about?

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1 hour ago, TomsFocus said:

1) I already have 2 direct debits so that's not an issue.

2) Yeah, TSB are one of those offering a switching bonus if recommended by a friend...I don't have any of those so if any of you guys have a TSB account... :wink: 

Nationwide did a 5% saver last year, £250 a month, but have now dropped it as it 'wasn't hitting the target market'.  Apparently, too many rich people were opening the account to receive £50 back after 12 months...as if they'd bother! :laugh:  It's that account that has now matured and I wanted to move elsewhere but savings accounts interest rates are all poor now, unless you can afford to pay in large amounts each month.  I'm genuinely surprised no-one on here has a current account getting interest now...maybe they're just not that well known about?

I have a TSB account... It only has 100 quid in it, and I haven't touched it in ages. Didn't even bother activate the new debit card they sent me recently lol. I signed up ages ago, back when they used to offer market leading rates, now they're crap. If there's any referral we can both benefit from let me know 😁

I use 'Ford Money' which offer market leading rates, and have done for some time. The customer service is great, and they're FSCS protected up to 85k, so you don't have to worry about them going bust. Google it, and check it out.

Also check the rates on the comparison websites like I said, maybe there are one or two accounts out there offering decent rates still, not sure.

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Have you thought about Premium Bonds? No interest obviously but your 'deposit' is safe and there's always a chance you could win a few quid. 

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7 minutes ago, Turvey said:

Have you thought about Premium Bonds? No interest obviously but your 'deposit' is safe and there's always a chance you could win a few quid. 

Yeah, I'm not really a risk taker!  Would rather have a guaranteed interest, even at a low rate, than the potential to win big but also to win nothing.  Without any interest you are technically losing due to inflation.  Plus premium bonds works best with bigger numbers - the more you have in the bank, the more chances you have to win, it's not really for people like me.

My Grandad had quite a lot in them and used to win occasionally, but overall it wasn't a great return.  Do you have any out of interest?

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19 minutes ago, TomsFocus said:

  Do you have any out of interest?

Yes, we have a few. When we sold our house prior to the last one we sold ie 2 houses ago, we rented for a year while our new house was being built. We invested the profits from that in PBs and have managed to keep some after we sold that house and bought the one we're in now. We are slowly using some of that up as we do up this house though, but we always had that planned. PBs are pretty easy to get access to which was quite important.

 

We've won quite often up to now (kiss of death!) but nothing over £100.......so far 🤞

 

We're not really risk takers either but it adds a bit of excitement to our otherwise boring life checking the app every month. 😃 It's not for everyone though and, as you say, the more you have the bigger chance you have of winning.

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Business account gets zero interest, private accounts get between 0.5% to 1.2% which is an insult, if you have private income or money that you have in savings you best option is to put it into an 'instant' ISA where you can withdraw money as and when you need it, mine currently pays 6.5%. If you have a private pension, the rules have changed now where you can draw it down by 25% but anything above that you will be Taxed on. You can however transfer 100% of your pension pot into an ISA  without having to pay Tax plus you will get interest on the amount. The disadvantage of a private pension is that your annual payment is only guaranteed for a period of 10 years from your retirement date so if you have £25,000 in your pot and your annual payment would be £1,500 and you die within that 10 years you will loose £10,000, with it in an ISA, you loose nothing and you can name any members of your family to inherit should you peg it. My advice to anyone would be, get yourself a good FIA accredited financial advisor.

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I have two regular saver accounts which pay 3%, one with First Direct and the other is with Santander. 
For each one I can pay in up to £300 a month so I do £300 to each one. They close it down after a year and you have to get a new account. 
 

I also got my wife to set up a Lifetime ISA which gets 25% a year from the government. Won’t work if you own any property though I don’t think. 

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9 hours ago, Milkman said:

Business account gets zero interest, private accounts get between 0.5% to 1.2% which is an insult, if you have private income or money that you have in savings you best option is to put it into an 'instant' ISA where you can withdraw money as and when you need it, mine currently pays 6.5%. If you have a private pension, the rules have changed now where you can draw it down by 25% but anything above that you will be Taxed on. You can however transfer 100% of your pension pot into an ISA  without having to pay Tax plus you will get interest on the amount. The disadvantage of a private pension is that your annual payment is only guaranteed for a period of 10 years from your retirement date so if you have £25,000 in your pot and your annual payment would be £1,500 and you die within that 10 years you will loose £10,000, with it in an ISA, you loose nothing and you can name any members of your family to inherit should you peg it. My advice to anyone would be, get yourself a good FIA accredited financial advisor.

Which ISA do you have for 6.5%?  

The pension info is all very interesting!  I'm under 30 so a long way from pension age though.  I'm also unable to work due to health issues (now you know why I'm on here so much!) so unless something drastically changes, I'm unlikely to ever own property or get a pension other than the standard one - and I have no intention of having children so would have no-one to leave money to.  I realise I'm in a very different financial position to most people. :smile: 

2 hours ago, The Finance Guy said:

I have two regular saver accounts which pay 3%, one with First Direct and the other is with Santander. 
For each one I can pay in up to £300 a month so I do £300 to each one. They close it down after a year and you have to get a new account. 
 

I also got my wife to set up a Lifetime ISA which gets 25% a year from the government. Won’t work if you own any property though I don’t think. 

I had a similar 1 year high interest account to yours, but because you can only pay in a small amount each month (£300 or so), the yearly APR works out much lower than it appears.  As I mentioned in the first post, I was looking at First Direct with their current 2.75% - but it only works out as about 1.2% over the entire year.  If I leave the savings where they are currently, they'll continue to get 1.1% anyway.  I'd make about £1 a month extra by moving money into the FD account each month so not worth the hassle.  What I wanted was a simple account to just immediately dump the whole lot into at around ~2%, but it seems those accounts just don't exist anymore. :sad: 

I don't think the LISA gives you 25% a year does it?  I set up a Help To Buy ISA before they stopped that as the monthly interest rate on those were better than my standard savings account but it's a slow process as can only move a small amount each month into it.  'If' I was in a position to buy a house within 10 years (who knows, maybe I'll find out I'm heir to a distant wealthy relative! :laugh: ) then the gov't would pay 25% extra BUT only if I use the money for buying a house.  I'm also not sure whether you can have another ISA as well as HTB/LISA after the first year has finished, or do they count as ISA's for the entire 10 years?

 

Since starting this thread, I have decided to change current account to the TSB one, currently with 3% interest, but dropping to 1.5%.  Not really sure what the actual monetary figure will be with the amount changing so often in a current account but it has to be better than the 0% I'm currently getting.  At the end of the day, if I find I really don't like TSB for any reason, it only takes 7 days to switch to another...or even back to the provider I currently use.  :smile: 

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53 minutes ago, TomsFocus said:

I don't think the LISA gives you 25% a year does it?  I set up a Help To Buy ISA before they stopped that as the monthly interest rate on those were better than my standard savings account but it's a slow process as can only move a small amount each month into it.  'If' I was in a position to buy a house within 10 years (who knows, maybe I'll find out I'm heir to a distant wealthy relative! :laugh: ) then the gov't would pay 25% extra BUT only if I use the money for buying a house.  I'm also not sure whether you can have another ISA as well as HTB/LISA after the first year has fini

I put £4,000 into my wife’s LISA every year and the gov pays £1,000 in. That’s what I meant by 25%, but it earns interest in top of that too. 

You can take it out to buy a house, or if you end up never buying a house you can convert it to pension. 

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Tom, it's not so much 'which ISA,, it's which investment Company you have it with, the one I'm with is an investment Company that invests your money in stocks, they monitor stocks 24/7 365 and if one drops in unit value they take it out and put it in another that is paying a better unit value. It's quite complicated but works, interest is paid on your investments on a monthly basis directly into your private Bank account and is Taxed at source (Tax is paid only on the interest, not the capital) Also, with an instant ISA you can put £11,000 per annum into it in any one Tax year and not pay Tax on it.

If for health reasons Tom you're unable to work you should be entitled to certain financial benefits, which I'm guessing you are fully aware of but it's still very advantageous to have a good financial advisor in your pocket as they can get you finance that you never knew you were entitled to, the Government don't tell you everything, you have to find out what entitlements you can get by other means of investigation.

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On 2/22/2020 at 3:33 PM, Turvey said:

Yes, we have a few. When we sold our house prior to the last one we sold ie 2 houses ago, we rented for a year while our new house was being built. We invested the profits from that in PBs and have managed to keep some after we sold that house and bought the one we're in now. We are slowly using some of that up as we do up this house though, but we always had that planned. PBs are pretty easy to get access to which was quite important.

 

We've won quite often up to now (kiss of death!) but nothing over £100.......so far 🤞

 

We're not really risk takers either but it adds a bit of excitement to our otherwise boring life checking the app every month. 😃 It's not for everyone though and, as you say, the more you have the bigger chance you have of winning.

We did the same and after two monthly draws we've been in its returned £125 So far.

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10 hours ago, TomsFocus said:

Which ISA do you have for 6.5%?  

T  :smile: 

It's probably a stocks and shares ISA, there's no cash ISA in the country that would ever pay that much.

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Most of those regular savers accounts (the ones where your balance must increase by a certain amount) have had rate decreases over the past years, I think my one with First Direct was 5% but then when it came to opening a new one at 12m, it was 2.75%, and I don't think they were alone in reducing rates. If you can currently afford to save (as compared to having savings that the balance isn't growing) then those type of accounts can be very good and rather than looking at it as 1/2%, look at it as it 2.75% on the newly saved money.

If you don't want to risk the cash deposited, then you may want to avoid stocks & shares ISAs, 

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18 hours ago, Milkman said:

Tom, it's not so much 'which ISA,, it's which investment Company you have it with, the one I'm with is an investment Company that invests your money in stocks, they monitor stocks 24/7 365 and if one drops in unit value they take it out and put it in another that is paying a better unit value. It's quite complicated but works, interest is paid on your investments on a monthly basis directly into your private Bank account and is Taxed at source (Tax is paid only on the interest, not the capital) Also, with an instant ISA you can put £11,000 per annum into it in any one Tax year and not pay Tax on it.

If for health reasons Tom you're unable to work you should be entitled to certain financial benefits, which I'm guessing you are fully aware of but it's still very advantageous to have a good financial advisor in your pocket as they can get you finance that you never knew you were entitled to, the Government don't tell you everything, you have to find out what entitlements you can get by other means of investigation.

Ah, I see!  My late Grandad had a similar stocks & shares investment.  He could afford to risk the money and it has made huge amounts, but also lost huge amounts as well!  It sounds like yours is constantly managed to only gain interest though (as far as possible) which seems like a better system.  

I am indeed on illness benefits.  I put it off for as long as I could and it's been an awful experience so far tbh.  I'm currently fighting for some more as well...I wouldn't wish it on anyone in all honesty, I don't know why anyone would chose to live on them and they're certainly not as easy to get or keep as the Daily Mail would have you believe.  Sadly the benefit system works in a really unfair way with a bit of an 'all or nothing' approach to illness benefits.  Currently I don't get enough to survive on, regularly have to dip into the savings which are not being replaced, but if I do succeed in getting the 'new' benefit, I'll then be able to access others which would make my income a lot more than I actually need!  This all or nothing approach just doesn't make sense to me, all I want is enough to get by on! :unsure:  Realistically, there's very little chance of me getting the new benefit though, it's all based on fitting certain descriptors and the rest of us just fall through the gaps between them.  I've already failed twice, now waiting for a tribunal hearing which I'm dreading!  

 

11 hours ago, AndyDC said:

If you can currently afford to save (as compared to having savings that the balance isn't growing) then those type of accounts can be very good and rather than looking at it as 1/2%, look at it as it 2.75% on the newly saved money.

Yeah, I see what you mean.  If you can afford to save ~£200 a month from your income then the 2.75% seems pretty good compared to other savings accounts currently.  I'm not actually saving any new money though, I don't have any surplus income, the money I have is already in a savings account at 1.1% which is why it's not worth slowly moving into another account at a 1.2% for me.  

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The problem is Tom that the benefits system is set up to fail those that are most in need of it, how can a medically unqualified person sit in front of you asking all sorts of irrelevant questions and deem you 'fit for work' when you're walking, or trying to, on a pair of crutches wearing a neck brace? The computers they use are programmed to say 'no' despite the evidence of your doctor. I used to claim 'working credit' as my income was below the National average but they changed the criteria and I had to send in proof of my income to HRMC submitting my last 6 months of invoices/receipts for that year and fill out a lengthy questionnaire that contained questions that weren't even relevant to my business, one question was 'how do you see your business growing and developing in the next ten years?' My answer was that the question was irrelevant as I would be retiring within that time and that the growth and development would depend on the market for what I produced, needles to say that my claim was refused and credits stopped because, in their words, 'I was not in business to make a profit'. 

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1 hour ago, Milkman said:

The problem is Tom that the benefits system is set up to fail those that are most in need of it, how can a medically unqualified person sit in front of you asking all sorts of irrelevant questions and deem you 'fit for work' when you're walking, or trying to, on a pair of crutches wearing a neck brace? The computers they use are programmed to say 'no' despite the evidence of your doctor. 

It is indeed a nasty system and as you said, how can someone with hardly any knowledge of your illnesses and issues sit there and decide whether you fit their criteria, even with medical evidence. 
The assessments are demeaning and an attack on personal issues. It's not the person doing the assessment which makes the decision though, it's a person at DWP with no medical training or knowledge who just goes on what the assessment report states. Unfortunately, the assessments are a series of questions and they only have certain responses. In most cases, it's a cut and paste answer from a script and doesn't actually reflect on what was stated in the assessment or in the paperwork/evidence.

I'm in the same posittion as Tom unfortunately and currently unable to work due to several illnesses. Like Tom, I had to fight for 20 months with DWP and go through 2 tribunal hearings to be told I should have been given the disability allowance from the start, considering that just 14 months prior to the DWP assessment (face to face) I had been awarded the previous benefit at a higher rate for an indefinite amount of time without needing to be seen by anyone from DWP or an assessment company. 
Also, the person who did my assessment stated they were a mental health nurse and had worked in the mental health environment for 15 years. When I checked up on their credentials, yes, they had worked in a mental health area but they had no additional qualifications except nursing. 

It just shows that the system is completely flawed. I hope England follows the route Scotland are taking and brings the assessments in-house so that no 3rd party company profits from these sham assessments. 

Anyway, sorry to hijack the post Tom. 

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Just thought I'd bump this to see if everyone else's interest rates have dropped due to corona virus? 

Just had a letter to say my main savings account will now drop from 1.1% to 0.25% in May!! 😮 

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27 minutes ago, TomsFocus said:

Just thought I'd bump this to see if everyone else's interest rates have dropped due to corona virus? 

Just had a letter to say my main savings account will now drop from 1.1% to 0.25% in May!! 😮 

Yes mine has gone from 1% down to 0.25% as well. Its annoying that an account already in flight can reduce the rates they pay us, but the HP on my cars don't go down to reflect current rates!

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1 hour ago, TomsFocus said:

Just thought I'd bump this to see if everyone else's interest rates have dropped due to corona virus? 

Just had a letter to say my main savings account will now drop from 1.1% to 0.25% in May!! 😮 

I think everyone's rates have gone down, unless you're on a term deposit of some sort.

Mine have too.

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34 minutes ago, The Finance Guy said:

Yes mine has gone from 1% down to 0.25% as well. Its annoying that an account already in flight can reduce the rates they pay us, but the HP on my cars don't go down to reflect current rates!

If you had a fixed savings account it wouldn't change during the fixed term.

Your HP agreement is a fixed interest rate, like you can get for mortgages. And as with mortgages they can be either fixed or variable.

Your savings account will be a variable rate, it will be in the terms that they can change it.

It's swings and roundabouts, because with your HP if the interest rates suddenly went to 10%, your HP would still be fixed on a lower than base rate 🙂

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1 hour ago, alexp999 said:

If you had a fixed savings account it wouldn't change during the fixed term.

Your HP agreement is a fixed interest rate, like you can get for mortgages. And as with mortgages they can be either fixed or variable.

Your savings account will be a variable rate, it will be in the terms that they can change it.

It's swings and roundabouts, because with your HP if the interest rates suddenly went to 10%, your HP would still be fixed on a lower than base rate 🙂

Haha yes I know this of course I know this! Still annoying though!

I have another savings account where interest is fixed so that’s good...and I get low rates on car finance anyway so I guess I shouldn’t complain....

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