Nationwide To Launch 3-Year 4.5% Bond

middlepuss

Thanks, OP. I'm looking for a multi-year bond at the moment and this is a good tip.

Any experts out there have a view on what's going to happen to ineterst rates generally over the next couple of years - is fixing at 4.5% a good idea?

VT82

middlepuss wrote: »

Thanks, OP. I'm looking for a multi-year bond at the moment and this is a good tip.

Any experts out there have a view on what's going to happen to ineterst rates generally over the next couple of years - is fixing at 4.5% a good idea?

I'm not going to get my crystal ball out, and I have no interest in locking my money away personally until I know what I want to do with it next year, but I saw a very good explanation about whether or not locking your money away at the moment is a good idea:

Assuming you could compound your savings at the same rate (which I don't think you can, but it makes the calculation easier without materially affecting the result), if you put £1,000 in at 4.5% for three years, you would end up with £1,000 x 1.045 x 1.045 x 1.045 = £1,141.16

Now assume you think rates are going up, so you would rather lock your money away for only one year at 3.15% best buy with Northern Rock. After 1 year, you would have £1,000 x 1.0315 = £1,031.50

To turn this £1,031.50 into £1,141.16 in two years, you would need the two year fixed rate then to be 5.18%: £1,031.50 x 1.0518 x 1.0518 = £1,141.13

I don't think the rates on two year bonds in a year's time will be 5.18%, so if I wanted to save rather than invest, and I didn't need access to my money, I would take the offer.

middlepuss

VT82 wrote: »

Assuming you could compound your savings at the same rate (which I don't think you can, but it makes the calculation easier without materially affecting the result), if you put £1,000 in at 4.5% for three years, you would end up with £1,000 x 1.045 x 1.045 x 1.045 = £1,141.16

Now assume you think rates are going up, so you would rather lock your money away for only one year at 3.15% best buy with Northern Rock. After 1 year, you would have £1,000 x 1.0315 = £1,031.50

To turn this £1,031.50 into £1,141.16 in two years, you would need the two year fixed rate then to be 5.18%: £1,031.50 x 1.0518 x 1.0518 = £1,141.13

I don't think the rates on two year bonds in a year's time will be 5.18%, so if I wanted to save rather than invest, and I didn't need access to my money, I would take the offer.

Very neat analysis. I think you just sold me a Nationwide bond!

Thanks.

nilrem_2

premierfella wrote: »

Can anyone confirm if they have still been able to open one over the phone today, or have knowledge of whether appointments are ever needed at Nationwide?

Thanks in advance.

One of the reasons that I opened two accounts with the Nationwide was that they were happy for me to walk in and open accounts without me having to make an appointment unlike some institutions.
When I enquired a few months ago about opening an ISA the lady I spoke to was quite happy to give me application forms to fill in at home and return at a later time or offered to open the accounts on the spot, unlike Northern Rock who now insist on an appointment.

lippy1923

premierfella wrote: »

The phone option seemed to disappear from the website yesterday, and I still need to get one of these opened but a branch visit involves an inconvenient special trip which I wouldn't want to result in being told "appointment required". Branch phone sadly not being answered.

Can anyone confirm if they have still been able to open one over the phone today, or have knowledge of whether appointments are ever needed at Nationwide?

Thanks in advance.

If you know what you want just ask for an application and sit down in the seating area for 5 mins and complete it. Then just leave the application with a cheque/cash (or however u want to open it) As long as you are ID confirmed (as in you have accounts already) you shouldnt need an appointment.
They only want you to have an appointment so they can try and sell you something lol :rotfl:just tel them you dont need advice and you dont want any other products.

viny1

can you open an account now and still be entitled to the deal , or do you need to have been with them for the 3 months.

Old_Slaphead

middlepuss wrote: »

Any experts out there have a view on what's going to happen to ineterst rates generally over the next couple of years - is fixing at 4.5% a good idea?

IMO they're going to increase.

Is fixing a good idea - it depends on your circumstances.

I've taken this bond but then again I've adequate funds available in instant access or coming off fixed rates in next year.

C_Mababejive

Nothing special about it.

Usual rip off of existing customers. Dosnt allow transfers in so they are only seeking to capture new money.

How many savers dont already have an ISA by December?

I'll bet it isnt on offer in April.

Anyway i wouldnt lock money away at that rate for 3 years with almost no access.

Try again NW if you really want to restore customer confidence.

We can see clear through your window dressing attempts to placate angry customers.

nilrem_2

C_Mababejive wrote: »

Nothing special about it.

Usual rip off of existing customers. Dosnt allow transfers in so they are only seeking to capture new money.

How many savers dont already have an ISA by December?

I'll bet it isnt on offer in April.

Anyway i wouldnt lock money away at that rate for 3 years with almost no access.

Try again NW if you really want to restore customer confidence.

We can see clear through your window dressing attempts to placate angry customers.

I am sorry to say that my view of Nationwide is quite different to yours and I don't agree with the points you make above -:

1) I don't see how you can describe the bonds as a rip off!

2) Many savers do not have current year ISA's by Dec INC myself, especially when ISA rates are so low lately.

3) Many people inc myself regularly invest in 3 year bonds and have done so for many years sometimes you win when rates go down and sometimes you might lose a bit when rates rise and you are locked in.

4) I have found the customer service at our local branch exemplary in fact I go there because the staff are so friendly and efficient, I have also found their fixed rate bonds to be good value in fact my 2 year bonds are just maturing and I wish I had done them for 3 years TBH!

5) As far as I can see they are offering two types here and ISA bond paying 4.5% and a 3 year fixed rate ordinary (taxable) bond paying 4.50% before tax, both look good value compared to other rates that I have seen and shall be looking in to them on Monday!

C_Mababejive

When you visit your local branch on Monday can you ask them why they dont allow transfers in from existing NW isa's please?