Kaupthing Term 12 or 36 months?

tomandkath

I have £30k to squirrel away and plan to open a Kaupthing term bond. I won't be using the money for a fair few years yet, so am tempted to get a 3yr bond, but is it anticipated that better rates will be offered elsewhere in a couple of years? Advice welcomed, thank you!

kostigovs

You pays your money and takes your chance. There is a fair bit of speculation that interest rates are going to fall so on that basis getting a higher rate just now for 3 years is no bad thing.
If rates go up however.....

I'm constantly reinvesting maturing funds and tend to go for a maximum 12 months investment. Who is to say whether that is the best way or not

[Deleted User]

Saturday's lottery numbers will be 25, 22, 43... :rolleyes:

On a serious note I've no idea

ultra10

Deleted_User wrote: »

Saturday's lottery numbers will be 25, 22, 43... :rolleyes:

On a serious note I've no idea

Why bother posting then ?? :rolleyes:

[Deleted User]

Made me smile. Might make someone else smile too!

Tozer

ultra10 wrote: »

Why bother posting then ?? :rolleyes:

I think to illustrate the point that nobody actually knows the answer to OP's question.

neil324

Depends what you think, if inflation is going fall back then the BOE will cut rates down like a mad man. On the other hand theres a winter of strikes on the way and if wage inflation takes off then they have said they will hike rates.
I'm about to open two, two year bonds and one, one year bond.

baby_boomer

Savings rates are going to head south because banks will have more confidence lending to each other. Current savings rates are way above the Bank of England base rate and this won't last forever.

Go for the 3 year rate if you can afford to tie up the money.

LongTermLurker

tomandkath wrote: »

I have £30k to squirrel away and plan to open a Kaupthing term bond. I won't be using the money for a fair few years yet, so am tempted to get a 3yr bond, but is it anticipated that better rates will be offered elsewhere in a couple of years? Advice welcomed, thank you!

Why not hedge your bets and put some of it in a 3 year FTD (PLEASE - let's start a campaign to stop calling them bonds - you won't be a bondholder - you won't get legal priviledge to company assets - you can't trade them on the open market and they don't pay coupons - OK, rant over ) and some in a 1 year one? Then, should rates rise, you have a chance of getting some of your money out at a high rate.

Better still, with KE you can cancel a FTD early at a penalty, so rather than putting £30K into a 3 year FTD, but £10K into three 3 year FTDs on the same day so that you can cancel one early if need be without being detrimental to the rest of your deposits.

However, I personally doubt we'll see significant rises in interest rates so would suggest best to grab a "very good" rate rather than holding out for a top rate, missing it and ending up losing out.