Any disadvantages to this tracker bond?

martin57

Hi,

Just seen this tracker bond from alliance and leicester and wondering if its a good deal to tie up 50k for a year? Not interested in any other kind of investment just a notice or fixed rate acoount with a bank.
http://www.santander.co.uk/csgs/Satellite?appID=abbey.internet.Abbeycom&c=Page&canal=CABBEYCOM&cid=1237874151043&empr=Abbeycom&leng=en_GB&pagename=Abbeycom%2FPage%2FWC_ACOM_TemplateW2
Am I right in thinking that 2.65% always above the BOE base rate is quite a good deal, so I won't be worried that if rate go up I will losse out with the above bond?

thanks for any advice

martin57

Stochasticity

If what you want is a fixed rate account for a lump sum, then the above is certainly a viable option with some degree of protection against interest rate rises. There aren't any other one year fixed rate accounts I would take ahead of the above option.

Another option would be opening 3 x Lloyds Classic Current Accounts with Vantage, depositing £7k in each and cycling £1k between them once a month (by standing order from A > B > C > A) to get a gross rate of 4% (indefinitely) on £21,000 of your £50,000 with instant access, and then putting the remaining £29k elsewhere.

If you are under 35 and have not bought a house before, you can open a Santander First Home Saver, make an initial deposit of up to £5k and pay monthly contributions of up to £300 each and every month to get a gross rate of 5%. Access is by account closure only.

It may also be worth looking at regular savings accounts. For instance, with a Santander Fixed Rate Monthly Saver, you can make monthly contributions of up to £250 per month and get a gross rate of 4%. Again, access is by account closure only.

psychic_teabag

Stochasticity wrote: »

If you are under 35 and have not bought a house before, you can open a Santander First Home Saver, make an initial deposit of up to £5k and pay monthly contributions of up to £300 each and every month to get a gross rate of 5%. Access is by account closure only.

I have heard that you can put in £5k opening deposit, massively overpay the second month (eg several k or even tens of k) foregoing interest for that month, and then paying in £100 per month after that, getting 5% on the whole lot. But I don't qualify for the account, so I've not investigated myself.

martin57

Hi again,

Thanks for replies, Unforunately my under 35 days are long long gone....now if it was under 55!!...:)

martin57

VT82

The product is very good in terms of today's one year term deposits. If you are a Santander current account customer, who hasn't got any major gripes about being a Santander current account customer, then it looks ideal for you.

It'll even outperform Llyods Vantage accounts if rates go up by 1% in the year (unlikely I know!)

Loughton_Monkey

Yes, I agree it is perfectly OK provided tying up for a year is OK, and you are prepared for ptoential hassle with Satander's poor service.

tushingham

psychic_teabag wrote: »

I have heard that you can put in £5k opening deposit, massively overpay the second month (eg several k or even tens of k) foregoing interest for that month, and then paying in £100 per month after that, getting 5% on the whole lot. But I don't qualify for the account, so I've not investigated myself.

Apologies for sidetracking the thread a bit but can anyone direct me to where i'd find out a little more about this ruse?
t

psychic_teabag

tushingham wrote: »

Apologies for sidetracking the thread a bit but can anyone direct me to where i'd find out a little more about this ruse?
t

Try this thread:
https://forums.moneysavingexpert.com/discussion/2118101