Monthly Income

Nellybee

I have a bond maturing and was wanting to put the amount of £25,000
into somewhere i can get a monthly income i know it wont be a lot was thinking about putting into a 5 year bond paying 2.96% interest.
But i think 5 years might be to long as i expect rates to rise in that time so i am thinking of monthly income trusts as a alternative. If anyone is invested in these what do you recommend

dunstonh

But i think 5 years might be to long as i expect rates to rise in that time so i am thinking of monthly income trusts as a alternative.

Moving to risk based investments because of low interest rates is not in itself a sound reason for justification.

Of course, using cash savings for income provision can be taking on quite a risk as inflation erodes the capital and coupled with low interest rates, that can make moving to investments suitable if you investing for the longer term (such as needing an income in retirement years). Whilst you take on investment risk, you reduce the risk of shortfall and inflation erosion. If you are going to invest, there are different ways to achieve a regular monthly income/withdrawal. You dont need to stick to unit trusts with monthly distributions.

Are you prepared to accept that the value will go down as well as up and that you should be leaving it in there for the long term?
Do you understand the different types of risk you are taking (both currently and with alternatives)?

typistretired

Not interested in any of the current account already mentioned on this site which pay either 3% (Lloyds, TSB, Bank of Scotland on £5,000 allowed three of each) or 5% (Nationwide Flexdirecton £2,500) these accounts pay monthly interest.