Investment

Kim18035

So what should I do ? I thought change in the bank interests should immediatelly affect the bonds interests and you are saying that this may take six months to be reflected . I am really confused . Plus Brexit on the way ( sometimes I think it will not happen because more and more people are not happy with it ).

ValiantSon

Kim18035 wrote: »

So what should I do ? I thought change in the bank interests should immediatelly affect the bonds interests and you are saying that this may take six months to be reflected . I am really confused . Plus Brexit on the way ( sometimes I think it will not happen because more and more people are not happy with it ).

Banks do not have to change the interest rates they offer on their accounts in line with changes in the BoE base rate. They are free to set rates at what ever level they wish.

If you want the best rate for one year and then to review the position, then you can get better than NS&I. A one year fixed rate savings bond is available at 1.9% form Investec (fully FCA regulated and FSCS £85,000 protected), or if you have a smart phone then Atom will pay you 1.95%.

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest#fixedsavings

Given the current low rates and potential rate rises over the coming year, I wouldn't personally lock my money away for more than 12 months, especially as the difference in rate being offered for longer is pretty low.

RG2015

Kim18035 wrote: »

So what should I do ? I thought change in the bank interests should immediatelly affect the bonds interests and you are saying that this may take six months to be reflected . I am really confused . Plus Brexit on the way ( sometimes I think it will not happen because more and more people are not happy with it ).

You are taking my statements too literally. The truth is that nobody knows what is going to happen either tomorrow, in 6 months or 6 years.

NS&I may increase their rates soon after a BOE bank rate increase but the BOE rate increase may not happen next month and may not happen this year.

Kim18035

Valiant son : from link you provided I understand, that only NS&I gives 100% cash protection and because I am looking for investement as safe as possible their 3 years offer seems to me the best. Also even if I decide to withdraw my money sooner as RG2015 mentioned I won't lose much compering the one year bond.

ValiantSon

Kim18035 wrote: »

Valiant son : from link you provided I understand, that only NS&I gives 100% cash protection and because I am looking for investement as safe as possible their 3 years offer seems to me the best. Also even if I decide to withdraw my money sooner as RG2015 mentioned I won't lose much compering the one year bond.

The accounts I linked to provide full protection up to £85,000 (just like any other bank). You are only talking about a sum of £50,000, so you are well within the limits. All of your money would be completely protected and safe.

If you might withdraw the money before a year is up then a fixed rate product is not suitable for you, whoever the provider is.

You were concerned about potential rate rises, so putting the money in a completely safe 1 year fixed rate bond at 1.9% or 1.95% fives you the best rate and allows you to review the position after a year if rates have gone up.

Kim18035

You are right , could you then please advise providers with the best bonds rate allowing flexibility regarding withdrawals ?

ValiantSon

Kim18035 wrote: »

You are right , could you then please advise providers with the best bonds rate allowing flexibility regarding withdrawals ?

The reason they are willing to pay you a higher rate is because you are giving them the money for a guaranteed period of time. If you were able to withdraw the money early then they wouldn't give you as high a rate!

Secure Trust Bank will pay 1.66% on a 180 day notice account; 1.56% on a 120 day notice account; or 1.46% on a 90 day notice account.

I am a little puzzled as to why you might need access to this money sooner than one year when you were considering locking it up for 3 years.

Kim18035

Well , it is very unlikely I will need access to my money before end of the term but never known , so want to consider all options before making a choice. From your experience , do you think that planned Feb interest increase will affect bonds rates ? How quickly after the interest change this could happen ? How it was in the past when interest rates changed ?

ValiantSon

Kim18035 wrote: »

Well , it is very unlikely I will need access to my money before end of the term but never known , so want to consider all options before making a choice. From your experience , do you think that planned Feb interest increase will affect bonds rates ? How quickly after the interest change this could happen ? How it was in the past when interest rates changed ?

Honestly, who knows?

There isn't a planned rate rise in February. There is a lot of speculation that there ill be a rate rise, but it has not been planned. The decision is taken at the meeting of the Monetary Policy Committee of the Bank of England. If rates do rise then that rise may result in changes in savings rates, but it may not; it all depends on the banks' perceptions of the market and whether they need to offer higher rates to attract customers, and what rates would represent a good business decision. So they may put rates up, but they may not.

If they do put rates up then it might be quite quickly, e.g. within a couple of weeks, or it may take longer. There is simply no way to know.

You can only make a decision based on what is available at the moment. If you want to wait until March to decide then do so, but the picture may be no different then, and it may even be worse because those offering the highest rates have got all of the subscribers they wanted and so will pull the rate.

Kim18035

Actually when asking about interest change I meant how this could affect bonds interest change not interest on savings accounts at banks.
What about investing money in property like that ones , is it safe ?:

http://lps.newnordicgroup.com/featured-investments?utm_source=google&utm_medium=cpc&utm_content=res_dis&utm_campaign=display_managed&gclid=EAIaIQobChMI-r3ulfLB2QIVx4AZCh3nXw1aEAEYASAAEgL4ZPD_BwE