£150K Reinvestment Help

sgx.saint

Hello.

Would appreciate some suggestions and advice relating to the reinvestment of some funds.

I had £150,000 invested in a fixed rate bond paying 4% over five years and this has recently matured.

I am now looking to reinvest this amount (I have been living off the interest and want to continue to do so) however I have not had much success at finding a similar rate as I now wish to protect the full amount under the Government FSCS.

I recognise this will mean I will have to split the money between two different products.

Ideally I would like to achieve 4% but this isn't looking feasible. I would therefore greatly appreciate any suggestions, advice or recommendations on how to go about reinvesting this money.

Thanks.

bowlhead99

What is the purpose of the investment? It sounds from the way you are talking that you are looking to save it for a rainy day in a bank deposit account again?

Given rates are low but are likely to gradually rise from their rock-bottom levels over the coming years, it may be unwise to fix for a long period of time such as five years and shorter fixes may be preferable - depending what you think will happen to rates and when.

However if you don't genuinely need the money for a decade or more - which might be likely, given you have already been able to happily lock it away for five years and are now happy to lock it away again for some further unspecified time without needing to draw on it - you could look at the world of investment funds. These do not generally come with capital guarantees but do come with the likelihood of superior long term returns than cash products.

It's not entirely clear because you are referring to the FSCS guarantee on depository savings, but the headline was reInvestment rather than renewing a savings deposit.

There will be a range of answers depending on timescale, attitude to risk etc and whether you are only limited to cash products rather than investment funds based on shares, bonds and real estate.

If you are looking at cash deposits, and if you have someone you can open joint accounts with, you could easily get half of the money earning 3%+ in savings accounts within the maximums available in the top paying high street current accounts, as long as you meet their various terms and conditions. And these are all instant access rather than requiring a 5-year commitment. But if there is only one of you, you will run up against the maximum amounts they pay interest on, earlier.

Flobberchops

I took the OP as saying s/he wants to invest the bonds for passive income, but perhaps they could clarify?

What about government Gilts?

xylophone

(I have been living off the interest and want to continue to do so)

You are no longer employed?
https://forums.moneysavingexpert.com/discussion/comment/68628149#Comment_68628149

I'm saving to give myself between three and six months emergency funds, should anything unexpected occur such as job loss or boiler breakdown.

I'm open to investing and\or saving with a small risk attached, not looking for high risk.

I'm not happy with 1.75% but I guess I've always just thought that with only £1100 currently saved that the interest rate won't make a massive difference because I'm not currently saving huge volumes.

I do have a company pension.