Investing for a monthly income.

Stompa

When I was looking at fixed rate deals a month or two ago, it seemed to me that only a minority offered monthly interest. And where they did, they often had a similar annual interest account with a higher AER.

So, if I were you, I'd not necessarily rule out accounts paying interest annually rather than monthly.

If you can find some good deals, you may find that you would be better off putting 5% (say) of your funds in an easy access account (from which you take monthly income) and the remaining 95% in 1 (or more likely 2 to be safe) fixed interest deals (paying annually).

Swannette

That's a really interesting idea, I hadn't thought of doing it like that, thank you I will certainly keep that in mind when choosing where to invest. Thanks again, Swannette.

fullstop

If you want to tie some money up till 2013 , you could have a look at Northern Rocks Fixed Rate Capped Bond Issue 5. Paying yearly or monthly interest.4.5% yearly 4.2% monthly interest 3.6 % or 3.36% net. If you need to take money out there is a penalty of 180 days lost interest on the amount withdrawn

Swannette

Thank you for telling me about this Bond. The problemis that I don't think I should commit to that many years. I'm hoping to be able to increase my hours to full time in a year or so (when my youngest son is at secondary school), then I think I should use the money to pay off half of my mortgage. Thank you for this information anyway, I appreciate any comment or advice anyone is willing to give.

Swannette.

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Anothe option then Swanette, Ruffler Bank has Fixed rate Bonds all paying 4.75% 1-5 years no monthly interest but it is paid 4 times a year. Not a well known bank ,but has had good feedback on this forum. It is a member of the FSCS £10.000 needed to start accounts with Ruffler except Cash Isa which is £3.600

Swannette

Cool, that sounds more like it, you're a star! Thank you, I'll look into Ruffler Bank right now. I must say I've never heard of them, but then again I'm not very up on financial institutions - as you can probably guess from my plea for help!!!

Thanks again, Swannette.

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And don't put more than £50.000 in the same Bank/ BS .