YBS Savings Bond

FBF2007

Hi Moneysavers, first time post so please take it easy on me :j

My company sharesave scheme is operated through YBS and through this I have been contacted and given the opportunity to invest in a 12 month savings bond paying 9.5% gross pa.

So far so good, but the catch appears to be that I must also invest at least 50% of my total investment in a L&G investment bond ‘for long term growth potential’. In addition, I can only purchase this product if I meet with an L&G advisor (they must want to try and sell me something else).

Now I was already looking to lower my exposure to equities/ISAs and was going to sell some to invest in a 12 month bond anyway. Therefore the savings bond looks attractive but I am not sure about the L&G investment bond. In addition, I will be looking for my Wife to make the investment as she has no income and therefore I think we should be able to get the full 9.5% return? I would re-invest the savings bond capital each year to take advantage of the best rates at that time.

Some questions you may be able to help me with
- Is the 9.5% a good rate in todays market ? [I can’t find any better rates]
- If the answer is yes then should I worry about the quality/potential performance of the L&G investment bond as they are having to package it with a high performing savings bond to sell it?
- Would I be better off just investing the full amount in a savings bond paying less of a return than the YBS savings bond, but without the risk of the L&G investment bond?
- Is it straightforward to ensure that my Wife receives the gross interest?

Many thanks

FBF

ramborai1987

its actually not worth it. the catch is the second part which is the L&G investment bond.


they make you think that its a good offer with the interest rate of the ybs bond but suck your money out of you from the l&g investment bond.

my best bet would be to make your own investment through hargreaves lansdown (fund/investment supermarket) and put your cash money into the highest 'unconnected' bond which i think is 6.8%

ramborai1987

oh i didnt see the bit about your wife. she's earning gross interest. it could actually work out then. best to wait for one of the IFA's to give you an answer to this thread.

FBF2007

Thanks for the reply ramborai.

Yep, it's the wife part that is important. If it weren't for the 9.5% I wouldn't be interested.

CHeers,

FBF