18mth investment/savings - premium bonds or fixed rate savings/bond?

Icey77

We have a CGT bill to be paid by 31 Jan 2017 and as we have the money now we want to set it aside (so that we don't spend it!) and hopefully have it work for us until we have to hand it over to the taxman. The amount concerned is £8,500.

After some research the high street banks seem to be offering approx 1% gross on fixed rate savings or bonds which last for 1 year. I am a SAHM with very little income so I can reclaim any tax deducted via my tax return.

According to the NS&i Website and probability calculator if we invested the £8,500 into premium bonds for 18 months we could win up to £150 which outweighs the £85 1% return from a High St bank.

Is there anything else I should consider? Thanks!

AndyT678

Icey77 wrote: »

According to the NS&i Website and probability calculator if we invested the £8,500 into premium bonds for 18 months we could win up to £150 which outweighs the £85 1% return from a High St bank.

Is there anything else I should consider? Thanks!

You should consider the high probability that you will win £0 in that time period with NS&I and that you could easily get 4%+ interest using current accounts.

xylophone

I'd suggest TSB Classic Plus, (£2000 @5%), Nationwide Flex direct, (£2500 @5% for a year) Lloyds Club £4000 @ 4%-you'll need 2DDs).

If you don't want to move existing DDs, one instant access saver and one internet saver with Tesco will allow you to set up a DD on each.


Register R85 on all accounts.

Cycle round £1500 from TSB to NW to Lloyds and back again each month - move the interest to Tesco internet saver.