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For the owld gits....
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digannio
Posts: 335 Forumite
I'm just about to do the biz with a lump of cash and set up a one-year fixed rate bond with Saga (first time I've been able to hitch up with them, I don't know whether to laugh or cry) at 3.75%. It looks to me the best one-year job around at the mo unless one of you kindly folk has some great secret they would like to share with an ever-so-grateful poster...... I don't want anything over a year because I believe things will have loosened a bit by then.
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Managed to scrape in on Chelsea BS 'summer bond' at a whopping (!!!) 3.8% :eek: but doesn't look like there's much around to top your 3.75% now, unless you want to tie up for more than a year (neither do I).
Don't take too long searching about (or at least proceed with the Saga first steps of application so you've at least got your foot in the door for the 3.75%), I nearly missed the Chelsea by mucking about.
Just logged off to do something more productive (like cooking lunch), when I read this http://boards.thisismoney.co.uk/tim/threadnonInd.jsp?forum=43&thread=98602&message=444587 might be worth thinking about.0 -
Thanks for that, there's some real food for thought there. I was hoping someone might pull a 4% one-year package out of a hat somewhere but, hey, there's probably more chance of me becoming the next Chancellor:rotfl:
Am I right then in assuming it would be better to take out a Birmingham Mid five-year bond at 5.1% and close it after one year if needs be and I'm still guaranteed to achieve slightly better than the 3.75% at Saga even after the 90-day penalty? And if things haven't eased it can sit there at 5.1% until they do. It sounds like win-win in taking out a five year bond with only 90 days penalty.0 -
See the potential fly in the ointment HERE:Am I right then in assuming it would be better to take out a Birmingham Mid five-year bond at 5.1% and close it after one year if needs be and I'm still guaranteed to achieve slightly better than the 3.75% at Saga even after the 90-day penalty?Can I make a withdrawal from this account?
If the Fixed Rate Bond is below 2 years no withdrawals are allowed. For Fixed Rate Bonds that are 2 years and over, you can make withdrawals subject to 90 days loss of interest on the amount withdrawn.0 -
But surely taking out a five-year bond with them and then, if needs be, withdrawing the whole amount after one year (thus incurring the 90 days penalty) would still bring an interest rate of 3.86 for that year, still making it better than most other one-year bonds that are around at the mo. And if you don't need to withdraw after one year you have earned 5.1% and can let it run until such time as you feel the need to close it and incur the 90 days notice penalty. Or am I being really thick?0
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I have 2 dislikes about current 1 year bonds
you can get 3.3% with instant access providing the option to take another decision in 6 months or whenever
a lot of bonds require a cheque to deposit, and make payments by cheque - loosing weeks of interest
the only bond I have used is Halifax which allows online deposits and payments0 -
sagalout1954 wrote: »Just logged off to do something more productive (like cooking lunch), when I read this http://boards.thisismoney.co.uk/tim/threadnonInd.jsp?forum=43&thread=98602&message=444587 might be worth thinking about.
Thanks for the above link, it answers my question to another thread I started today before I read your post above:
http://forums.moneysavingexpert.com/showthread.html?t=1988773Never let the perfume of the premium overpower the odour of the risk0 -
Did you read the quote in my post above? It suggests that you will not be able to withdraw after a year but only after two years - something that you would need to check with BM.But surely taking out a five-year bond with them and then, if needs be, withdrawing the whole amount after one year (thus incurring the 90 days penalty) would still bring an interest rate of 3.86 for that year, still making it better than most other one-year bonds that are around at the mo. And if you don't need to withdraw after one year you have earned 5.1% and can let it run until such time as you feel the need to close it and incur the 90 days notice penalty. Or am I being really thick?0 -
Good point Baldur, I think someone in the linked thread does advise checking w/d terms with the relevant institution before using this particular method of gaining a better rate of interest. If not, at least you have.
You must pick one which allows 90 day notice AND withdrawals after 1 year.
Assuming you have, I wonder if the notice must be given at the 1 year point, then wait 90 days for your money in order for the whole maths thing to work. Or whether you give notice after 9 months in order to get your money at the 1 year point.
I really wish I was brighter at all this!0 -
Scottish Widows beats that at the moment.Am I right then in assuming it would be better to take out a Birmingham Mid five-year bond at 5.1%
It may be worth looking on part at some of the structured products. Whilst I am generally not a fan of these, you do normally get some good income ones after a market crash. 7% is possible at the moment. For some of the money, that may make a difference and make the small element of risk worthwhile.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
The problem with the Scottish Widows account is that you lose a full year's interest if closed early. Owwch!
Baldur, sorry, I didn't read your post closely enough. Me ed must be in a spin with this war that is the business of trying to find a reasonable rate out there. I've got some questions in with Birmingham Mid to get everything clarified before taking the plunge. Cheers.0
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