Fixed Rate or Tesco Saver ?

truckid

I have been looking for a home for my lump sum for a while, preferably fixed-rate for 6 - 12 months (would fix for 12 months if I could find an account with lesser penalties for early withdrawal).


However the rates are getting worse by the day, and my options are limited. I have a Tesco Instant Saver account, which I have applied for a long time ago, but have yet to make use of.


My options seem to a fixed such as nationwide (want to avoid 'high risk' accounts such as ICIC or Anglo Irish) with a meagre 3.38% or I could put the money in the Tesco account, which I believe is over 3% plus I have my 1.5% bonus.

I guess it all depends on the rate changes over the next 6 -12 months, but they seem to be headed south at an alarming rate, with even talk of 0%. Question is, even with rates at 0%, would I still receive my 1.5% bonus ?

If I take a 6 months timeframe, The first couple of months at 5% may offset later months at around 2-3% (if I factor in my bonus). I don't need access to my money for at least 6 months+, but at least I still have instant access with Tesco.

Any thoughts ?

Nick_C

For a "low risk" fix, how about West Bromwich BS at 4% fixed for 1 year?

See http://www.westbrom.co.uk/westbrom/savings.category?id=1

truckid

Thanks for that, the bond itself seems quite good.

However, there is a possibility that I may need access to the money within the year, that is why I would like an account with options for withdrawl. I can safely put the money aside for 6 or maybe even 9 months, 12 is pushing it

myhooose

I'm in a similar situation and have come up with the following,

Julian Hodge Bank - 9 months fixed at 4.25%

or investec high 5 account which guarentees to be the average of the 5 highest savings rates, but requires 3 months notice

nzseries1

I'm in the same situation as well. I have chosen to stick with my tesco saver (currently at 5.1% including the bonus, which I assume yours is too) rather than go for a fixed rate account.

Tesco are usually quite good at letting us know well in advance of interest rate changes - i.e. after a base rate drop, it's quite a while before their interest rates drop too.

I love the tesco account because it uses faster payments and has by far the best interest rate out there if you have got the bonus. Plus no penalties for withdrawl.. .etc etc.

Remember though if you don't yet have the Tesco Card Reader, you will need to get one to withdraw money. That takes 2-3 weeks.

sdooley

Tesco one seems to be good for now - you could combine it with 'drip-feeding' into a regular saver (one of the ones you can put a flexible amount in so if it becomes more likely you need to withdraw some of your lump sum you can cut your regular saver contributions to the minimum 10 pound or whatever).

truckid

Julian Hodge Bank seems like a good option, and it has a 9 month account which is good.

However, how safe are Julian Hodge ? Are they any more or less risky than ICIC ? Its not a bank I have heard of previous, and the fact that its private makes it less risky ?


My fallback seems to be Tescos. If I deposit money for a part month, do I get paid interest on that amount for the numbers of days it was there, even if I withdraw it all before interest is applied ?

nzseries1

truckid wrote: »

My fallback seems to be Tescos. If I deposit money for a part month, do I get paid interest on that amount for the numbers of days it was there, even if I withdraw it all before interest is applied ?

Yes, interest is calculated daily. But another thing to remember with Tesco is that interest is paid annually on the last business day in March.

nzseries1

Do you have the Tesco Internet Saver (5.1% interest including bonus), or do you have the Tesco Instant Access (3.6% interest). I've assumed that you have the internet saver.

truckid

Yep,

I have a Tesco Internet Saver (5.1% including bonus). I will have a look at Julian Hodge Bank and see what their conditions are

kostigovs

truckid wrote: »

Julian Hodge Bank seems like a good option, and it has a 9 month account which is good.

However, how safe are Julian Hodge ? Are they any more or less risky than ICIC ? Its not a bank I have heard of previous, and the fact that its private makes it less risky ?


My fallback seems to be Tescos. If I deposit money for a part month, do I get paid interest on that amount for the numbers of days it was there, even if I withdraw it all before interest is applied ?

They are Welsh and I have invested with them for a few years without any problems.

They are FSA registered