Alternative to NS&I Income Bonds for surplus cash?

Aged

Now that the interest rate on NS&I Income Bonds is a measly 0.75% I think it's time to transfer the cash elsewhere. ISA allowance for this year already used up. I'm thinking fixed rate bonds would be the best idea but only fixing for 1 year as interest rates will hopefully be on the way up soon. I understand that now is not a good time for investing, so just looking for the best home for my money until things are a bit more settled. Does this seem reasonable?

jimjames

Aged wrote: »

. I understand that now is not a good time for investing, so just looking for the best home for my money until things are a bit more settled. Does this seem reasonable?

Not really. People have been saying it's a bad time to invest for at least 5 years, since then the markets have risen substantially. If you want income and can hold long term it doesn't really matter what the capital value is on a particular day.

Aged

My FA recommended that we hold off from investing this money because of all the uncertainty over Brexit etc. Maybe because I'm a very cautious investor? Anyway, he is in the process of retiring so things are likely to be a bit up in the air for the next few months as I go through the process of finding and getting used to his replacement. I want to move the cash away from NS&I in the meantime to somewhere that will pay a bit more interest.

xylophone

http://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

FatherAbraham

jimjames wrote: »

Not really. People have been saying it's a bad time to invest for at least 5 years, since then the markets have risen substantially. If you want income and can hold long term it doesn't really matter what the capital value is on a particular day.

5 years?! Surely you mean the last 5,000 years?

Warmest regards,
FA

Aged

OK. Let me put this another way and at the same time try to answer my own question. I don't feel confident enough to invest this sum at present so keeping it in cash is the way I'm going to go, then I'll review the situation in a year's time. If I move it to 1 year fixed rate bonds I can more than double the interest rate I'm receiving (1.75% as opposed to 0.75%). If I split the sum between banks and choose reputable banks, my capital sum will be guaranteed. On the other hand if I invested it now and the stock market correction, Brexit effect or whatever comes to pass, I could have less in a year's time than I have now. The only downside I can see is that if for some reason I change my mind and decide I want to invest the cash at some point before the year is up, I won't be able to get it back.

To me this seems a sensible and cautious approach.