Coop Development bonds - are they a good bet?

bigadaj

Ken68 wrote: »

You could be right Bowhead, will wait and see.
But I do see that the rate is fixed for the term.
Would they be allowed to default?

Yes, you are lending money to a company, if they go bust or into administration then capital will not be repaid.

Ken68

It could happen, Big., but unlikely surely. Probably underwritten by Big Daddy Co-op.

patientperson

Robinsroost wrote: »

The Coop do good rates for savings on their development bonds - 2.75% for 1 year rising to 3.5 for 3 years.
are they worth a punt?
Thanks

As at 01/06/2016 the gross rates are 2.75% (1yr) / 3.04% (2yr) and 3.35% (3yr).

Back in 2013 when I first invested the rates were 3.10% / 3.45% / 3.75%. I was already a member of the Midcounties Co-Op and a customer of the their Co-Op Energy division. I went ahead with a minimum investment. 2 bonds have matured and I reinvested the capital. I still have 3 running and I will probably renew for a further term providing the rates do not collapse. Investing in stocks and shares is a risk and one must be comfortable with that risk or simply do not invest.

This is not financial advice and is merely my comments on these bonds.

AnotherJoe

Ken68 wrote: »

Thanks Robin...interesting, compares with Santander 123 without all the faffing about.

It doesn't compare in any respect at all.its a massively higher risk for slightly less interest. Sounds like a gobsmackingly bad idea.

Ken68

Joe, it is a slight risk,a comparable rate, and a lot less hassle than all the hoops put up by the banks.

AnotherJoe

Why is it a slight risk? Woolworths. BHS. HMV. Etc. A lot of High Street stores have gone under the last few years. CooP has a dismal record of financial management and is in an incredibly tough competitive environment with new low cost competitors. I would not be at all surprised if they were gone within the next few years, all of a sudden.

Hoops for S123 are minimal. Set up a couple of standing orders transfer a couple of direct debits, job done.

jimjames

Ken68 wrote: »

Joe, it is a slight risk,a comparable rate, and a lot less hassle than all the hoops put up by the banks.

You don't appear to understand risk at all. Until you do some reading I'd really suggest that you don't invest in anything outside of a bank account.

dunstonh

It could happen, Big., but unlikely surely. Probably underwritten by Big Daddy Co-op.

That isnt how it works.

Ken68

Looks to be a NONo Robin. Welcome to the board.

AndyT678

patientperson wrote: »

As at 01/06/2016 the gross rates are 2.75% (1yr) / 3.04% (2yr) and 3.35% (3yr).

...

Investing in stocks and shares is a risk and one must be comfortable with that risk or simply do not invest.

And one ought to to adequately compensated for taking that investment risk particularly when it's a business with a history of poor financial control. In that context a return that is CAPPED at 3% against the risk of a total loss is taking the p1ss!

When there are plenty of companies out there with better dividend yields than this which also have the chance of capital gain or FSCS protected bank accounts paying more what flavour of idiot do you have to be to think this is a good offer?