1 year fixed bond 6.3% gross

Swipe

ManAtHome wrote: »

Latest rates are Birmingham Midshires 6.35% (minimum £1)

I keep opening Birmingham Midshires bonds with an initial £1, only for the rate to go up again the following week. I think I'll wait a while longer before I open any more. I wonder if they have a limit on the number you can hold?

ashm1

Swipe wrote: »

I keep opening Birmingham Midshires bonds with an initial £1, only for the rate to go up again the following week. I think I'll wait a while longer before I open any more. I wonder if they have a limit on the number you can hold?

I got stung on this setting up a bond to feed next years ISA contribution.

IMO it indicates that the Bank of England have underestimated inflation pressures in the economy.

http://investing.reuters.co.uk/news/articlenews.aspx?type=topNews&storyID=2007-05-23T083758Z_01_L23190800_RTRIDST_0_STERLING-RISES-GILTS-FALL-AFTER-BOE-MINUTES.XML&related=true

http://www.bloomberg.com/apps/news?pid=20601102&sid=axQRWkSZed64&refer=uk

ManAtHome

Maybe going up now, but could just as easily level off or go down (4-5 year rates seem to have "stuck" at 6.2%).

1. Don't put all eggs in one basket (I also have a BM 6.05% 1 year from January - has been ahead of the game for several months, is now behind but if my worst savings rate ends up being 6.05% I'll not be too upset).

2. Don't over-estimate returns - half a percent difference gets you an extra fiver a year per thousand before tax (£4 after basic savings tax). I know that an extra few quid is better in our pockets, but if you're dealing with really big number, see rule 1...

Has to be better than the 4-5% rates a few years back..?