Hsbc 5% bond 5 years

kjmtoday

Hello again

Advice please, putting 50 k into HSBC they are offering 5% fixed for 5 years. I think this sounds ok , cant see interest increasing more than this in the next 5yrs

DiggerUK

kjmtoday,
Many will point out that inflation could easily go into double digits in the next 5 years. I believe that to be the case.

The other problem if you put in 50K now is that it will be over 63K (less interest) by maturity, over the savings guarantee threshold of 50K.
I don't recommend fixed rates at this time, but if you do go down that route you should only put in 40K now.

Good fortune.

kjmtoday

thankyou for advice.

I take note of what you say, would you put in a fixed 1 year rate? I am in alliance leicester and its only paying 2.5%

pbw

5%pa on a 5 year bond at hsbc?

i can't seem to find details anywhere, please provide link

thanks

DiggerUK

kjm't,
1 year fixed is about limit I would go to. As I said on funkey_monkey thread we have never gained with fixed rates apart from last year. Cash needs to be instant access today.
If you have debts, including mortgage, now is the time to pay them down. Always viewed saving whilst holding debt as a cart and horse situation.

Best of fortune.

rb10

You can get good rates on one year fixed accounts at the moment, see here.

Remember that five years is a long time, and a lot can change in that time. It is now only six months since you could easily get 6%, just think how much has changed in that short time.

dunstonh

Is it a bond or a fixed term deposit?

Lokolo

dunstonh wrote: »

Is it a bond or a fixed term deposit?

Think its the former. I cannot find anything on their site to indiciate they are giving 5% for 5 years in their fixed term accounts. (I now don't know if you were actually asking or it was a rhetorical question)

Baldur

Looks like a Money Market deposit, as their fixed-rate bonds are for </=£49,999 http://www.hsbc.co.uk/1/2/personal/investments/financial-advice/money-market;jsessionid=0000kK2g5nDE_slj5b4LhFR_xOB:12c58t1e1

D1zzy

I only really started serious saving in 2007 and gradually moved into fixed rate bonds (mostly 1 year some 2 year) at round 6%-7% - so that is the norm for me and 4% seems pretty rubbish. As the old stuff matures I'm sticking at 1 year bonds assuming that at some stage rates will start to rise and the 6 and 7% may reappear. Anyway I digress - but was just wondering what would have been considered a good fixed rate before the madness of the last couple of years.

dunstonh

Lokolo wrote: »

Think its the former. I cannot find anything on their site to indiciate they are giving 5% for 5 years in their fixed term accounts. (I now don't know if you were actually asking or it was a rhetorical question)

I wondered if it was a guaranteed equity bond with a 5% income. With whole of market bonds giving 8%, then 5% from a bank would be realistic.

However, the misnaming that frequently occurs with fixed term deposits being called bonds could mean it is one of those. Although GEBs are technically not bonds either and are also misnamed.

Or it could be an investment bond with withdrawal being discussed. They are typically for a minimum of 5 years and 5% is the maximum annual amount that can be paid out without breaking tax deferral rules. Investment bonds are also misnamed as bonds.