Advice and thoughts on my savings so far

Burlesque_Babe

I'm still on a steep learning curve so hoping that you can advise me if my plan to get a bond is a good idea.

I've put £3,000 in an ISA with NS+I (6.03%, just gone up to 6.3%)

I've put £3,000 in Premium Bonds this month (the gamble, I know)

I have £19,500 in my Abbey e-saver which I'm transferring to the Yorkshire BS at £500 per month.

I was thinking of moving £5,000 from the e-saver to the 2 year Leeds BS Bond and then when it matures move it again, possibly to the YBS each month if the rate is still good.

I would need 24x £500 (12,000) over the next 2 years to drip feed into the YBS so moving £5,000 to the Leeds wouldn't impact on that in any way.

A good idea to move the money to a 2 year bond? Is the Leeds the best one at the moment?

Burlesque_Babe

No thoughts on this at all???? Even on the Leeds bond as a product?

Burlesque_Babe

obviously no thoughts or advice either way in the 110 thread viewings.....:rolleyes:

I'll stick £5k in the Leeds bond then.

[Deleted User]

Keren, I would say it depends on where you see interest rates going over the next 2 years. If there is one more increase then you may well be able to find an instant access savings account that matches the interest rate you get on the Leeds BS 2 year bond. If there are 2 or more increases, then you will be able to get a better interest rate elsewhere. Of course, they could also go down, in which case this fixed rate bond would be a good idea!

So, ultimately it depends on what you think will be happening with interest rates over the next two years and whether you would be happy if the interest rates on other accounts/bonds overtake the 6.5% you can get on this bond.

Also, I've just done a quick search and there are some bonds/fixed rates that beat the 6.5% the Leeds BS 2 year bond has. For example you can get 6.75% at the United Trust Bank (2 year fixed), 6.7% at Anglo Irish (1 Year) or 6.7% with BMW Bond (backed by Newcastle BS) for 1 year. So unless there is some other reason for the Leeds BS, there may be other options around.

Burlesque_Babe

cheers sce8mph, i'll have a look at those bonds.

ManAtHome

The Leeds 2 year (and 3 year) fixed is also 6.70%

I've put some into the 3 year fixed - although it's quite possible we'll see IceSave hit another half percent, don't think it'll go above that, or hang round for the next few years.

As already said - you have to make your guess (then stick fingers in ears and repeat LA LA LA LA for a while...).

Also worth a look at NS&I index-linked bonds - currently 1.35% plus RPI (think this is around 4.3% at present, although should drop if BoE get their rates on target). These are tax free, so not too good if you don't pay tax, very good if you pay higher-rate, and another bit of a gamble on standard rate. You can cash them in during the term though with some loss of interest (not worth it during the first year though). May be another issue coming out later in the year possibly slightly higher rates (October or November) - another gamble...

Bear in mind that 1% extra on £5k gets you £50 a year - so not really an AAAAAGH moment if they move 0.25%.

jinkssick

ISA is done

i would take the bond out and add it to the money 15k and put it in the ns and i index savings at 5.65% for the three years if need be.

ManAtHome

NS&I not guaranteed to return 5.65% though - could be more, could be less. For a standard-rate taxpayer, the Leeds returns 5.35% net, 4.02% for a higher-rate payer - to match that, RPI needs average either 4% (quite possible) or 2.67% (highly likely).

[Deleted User]

ManAtHome wrote: »

The Leeds 2 year (and 3 year) fixed is also 6.70%

Apologies, I was looking at the 2 year fixed rate bond which is at 6.5% whereas the 2 year fixed rate postal bond is at 6.7% (which moneysupermarket didn't show when I searched it). Couldn't they have given them more unique names?!

ManAtHome

LOL, yes I had to do a double-check when I applied - wonder how many people hit the wrong button and haven't realised yet...

Burlesque_Babe

Thanks to you all, it's given me some more things to think about.

I don't know anything about index-linked bonds, so I'm going to go off and read up about them.