5year bond: YBS vs. Aldermore

LemonTree_3

Folks,
I'm planning to put £3,000 away for 5 years.
To the best of my knowledge Aldermore pays 5.40% AER
http://www.aldermore.co.uk/savings/fixed-rate.aspx

and Yorkshire Building Society pays 5.30% AER
http://www.ybs.co.uk/savings/online/ebond/index.html?int_cmp=right_banner-savSection_ebond_july09

I would like to open the bond online.
I'm already a customer with YBS (holding an Internet Saver plus Regular saver)
and imagine it would be fairly easy with that identification procedure stuff.
However, I'm tempted to go for Aldermore because of the higher interest rate. On
the hand I don't know Aldermore and think it might be more of a hassle to open
the bond with them.
Any thoughts or opinion on that?

Thanks!

ManAtHome

Difference is only £3 a year before tax...

Both of them seem reasonable peeps (IMHO) - YBS should be a click and go as you've been through the "it's me, honest" stuff, Aldermore may be a bit more effort.

Not sure about 5.anything being a good deal for 5 years, but, as they say, your mileage may vary!

Speculator

LemonTree wrote: »

Folks,
To the best of my knowledge Aldermore pays 5.40% AER
http://www.aldermore.co.uk/savings/fixed-rate.aspx

2, 4 and 5 YEAR FIXED RATE ACCOUNTS will be withdrawn and replaced paying reduced rates w.e.f. 4pm 22.9.09.

https://www.emoneyfacts.co.uk/news/savings-news.aspx?newsarticleid=189293

premierfella

Aldermore give you 10 days to fund the bond, so it may be worth applying to them anyway before 4pm to keep open that option.

Aldermore were able to electronically verify me as a new customer without having to send identification documents.

I preferred Aldermore to the YBS bond you mention not simply because of the small interest rate differential but the fact that the YBS "5 year" bond has a longer term (maturity 31DEC14). Personally I would want a higher rate than 5.4% to compensate for the extra few months given the option of the two accounts.

Rollinghome

Base rates are now about as low as they can go so I'd also be taking into account any 'get out of jail' clause available and be willing to pay for it with a slightly lower rate. 5 years is a very long time and interest rates could go anywhere. Remember when even branch based accounts were paying 16% and more? Being able to get out despite having to lose 90 days or more interest could be a life-saver if you were stuck getting just 5.40% with soaring inflation. I know watching my money lose value year after year without being able to release it would bring tears to my eyes but maybe I'm just a bad loser.

LemonTree_3

Thanks everyone for your advice! I was too late for Aldermore, so I went for YBS.
I didn't have to do any identity checks which saved me a bit of hassle.