Instant or Fixed?

10_66

OH is due £35K inheritance in a couple of months, but is unsure of whether to put it in existing instant access account at 3% just in case a good fixed rate comes along, or whether to put it into a 1 year fixed currently at 3.51% (if that's still around when received), difference of £142.80 net interest over 12 months. Not sure what the rate trends are supposed to be. Already got a cash ISA this year and IL Saving Certificates. Any suggestions? Thanks.







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Ark_Welder

If your concern is that rates might increase, then split it: some into a fixed-rate now with the rest in instant access. With the instant access you have the option of another fixed rate at a later date. But remember that once interest rates do start to rise then it could be the first of several.

Sparky47

I would go for the 1 year fixed, maybe even a 2 year fixed (Post Office are offering 3.96%).

I can't see interest rates moving much in the next year or so, if at all.

midnightfunkygibbon

Be careful about who you invest with -check out how you you will get your money back at the end of the term. I have a two year fixed rate bond just about to mature with Birmingham Midshires. As I don't want to re-invest (rate not competitive enough), my maturity options are (a) be sent a cheque, or (b) pay £35 for a "telegraphic" transfer (not BACS). All this despite the fact that I have had interest transferred electronically to my bank every month during the term of the bond.
I am convinced none of this was in the original Terms and Conditions, so may complain, but at the moment the "cheap" option is to go for the cheque and not have access to my money for two weeks or so (allowing for the cheque to reach me, bank it and then clear). Looks like a nice earner for someone!:(