Heritable Bank 5.5% fixed rate for 5 years

zzzLazyDaisy

http://www.moneysupermarket.com/savings/SavingsDetails.asp?SavingsID=22714&Amount=25000&Results=4&Lender=

Could someone have a look at this please and tell me if you can see any potholes?

I know 5 years is a long time, but this is a lump sum for my retirement. I cannot take any risks with it, and need a safe haven at the best interest rate.

I defo will not need it before 5 years, but will probably need it soon after that.

Thanks a million, you guys are wonderful

Daisy x

strawberrylane

Well, as nobody else is replying let me have a go. 5 years is a long time to lock up your money but it really depends on your circumstances and attitude to risk taking. At the moment, 5.5% is an excellent rate but who knows what will happen to rates over 5 years. That said, I think that if you are prepared to lock the money away for that period and want the certainty of a fixed rate then I would go for this. But I wouldn't put more than 35K there (or 70K in 2 accounts if you have a partner). HTH.

Milarky

I agree that the main consideration is access to money, not the chances that the rate pales over that time. I'd say this would stay competitive and is worth putting (say) a third of your money into - which would leave you with sufficent 'rainy day' funds. Also it is a fixed investment so as time goes by you can 'rebuild' your savings and increase the size of this buffer.

zzzLazyDaisy

Thanks for the opinions, guys, much appreciated.

Strawberry, why do you say no more than £35k, out of interest?

I was thinking of splitting the lump sum and putting some into the 5 yr fix and some into the 2 yr fix, both with the Heritable. This would give me the opportunity to move some at two years and/or access it, should I need to. But maybe I'd be better to look for a competitive 2 yr fix with another institution?

Thanks again

Daisy

strawberrylane

If I am committing a large chunk of money for a long period (5 years in this case) with no facility for early withdrawals or closure (as is the case here) I just want the comfort of knowing that my funds are covered by the Financial Services Compensation Scheme (even though, as an aside, I feel that the compensation scheme is a really last ditch affair which I hope I never have to get involved with for many reasons which I won't go into here). Nevertheless, the FSCS is there to provide compensation payments in the extremely remote circumstances that the deposit taker (Heritable in this instance) goes t*ts up during the 5 year period you'd be saving with them. The payments under the scheme are limited to 100% of the first £2,000 on deposit and 90% of the next £33,000, i.e. you'd get back £31,700 if you had deposited £35,000. If you'd deposited £100,000 (say) you'd still only get back £31,700. So, I personally wouldn't commit more than 35K. HTH.

Secret_Wookie

Why not have a look at HSBC's 3 year fixed rate High Interest Deposit Bond
paying 5.25% Gross on a 3 Year bond. Very good rate from a major player
who you can visit on the high street.