fixed rate - advice please

joyfull

Sorry, sorry, I know this is asked ad infinitum!

I have 3 fixed bonds about to mature. (one at 7.2% :(weep, :(weep). I need to re-invest and wonder whether to fix for longer than 1 year.

Am I right in thinking that base rates are likely to stay around 0.5% for some time to come?

And, if so, this would influence the rates paid on savings ie. keep them relatively low ie 2-3%?

Or is there a bigger picture affecting interest rates I'm not aware of.

Thanks so much.

Ifts

Thats a difficult one to answer. What I do when one of my bonds mature is to fix for the best rate I can get for the time I can lock it away for.
Last month my 2 year fixed rate with Firstsave matured and I reinvested it with Aldemore bank this month, I took the 3 year option @ 4.15% (they have dropped their rates in the last week). At the end of this month I have a 2 year bond maturing from the The West Bromwich, which I will prob put into the 3 year bond with the AA (if they don't also drop their rates).
I know rates are low and fixing for 3 years is risky, but recently rates for fixed term deposits have been coming down. If base rates are low it wont have much effect on what savers are being offered as Libor rates also remain low, however with the government withdrawing its financial support for the banking sector the banks might start to offer better rates to attract retail deposits to shore up their balance sheets.
One of my fixed rate bonds does not mature till Sept 11, when I took it out in 2008 I also thought maybe I was risking it locking it up for 3 years @ 7.67, now I wish I had fixed for longer! You cant win them all.