Savings ISA for 70K

JohnLock

Hello.
I am approaching £70,000 savings.

I am looking for a 1 YEAR fixed rate bond to put in at least £50,000.

According to this search

https://www.moneysupermarket.com/savings/results/?goal=SAV_FIXEDRATEBONDS

Al Rayan Bank offers the best rate of 2.17%.
There are other banks offering similar rates too.

Questions:

1) Can I trust this bank?
2) Is it better to spread the money across different fixed rate bonds?
3) Are ISAs a better option?

New to all this.
Thank you.

eskbanker

JohnLock wrote: »

Al Rayan Bank offers the best rate of 2.17%.
There are other banks offering similar rates too.

Questions:

1) Can I trust this bank? It's FSCS protected so your money is safe, in the sense that if the bank went under you'd be reimbursed. However, the rate isn't guaranteed, as with other Sharia institutions:

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

2) Is it better to spread the money across different fixed rate bonds?
Not necessary if you're staying below the FSCS protection limit of £85K.

3) Are ISAs a better option?
You can only pay £20K into an ISA in any given tax year so it's a moot point.

See answers inline above....

JohnLock

eskbanker wrote: »

See answers inline above....

Thanks.

When i save more than the FSCS protection limit of £85K, do I then put the £85k into one bond and then start putting money into a new bond?

Although the limit is 1 million on some bonds, would it be unwise to put more than 85k into one bond because it's more than the FSCS limit?

Is that how it works?

xylophone

See https://www.moneysavingexpert.com/savings/safe-savings/

soulsaver

eskbanker wrote: »

Can I trust this bank? It's FSCS protected so your money is safe, in the sense that if the bank went under you'd be reimbursed. However, the rate isn't guaranteed, as with other Sharia institutions...

Whilst Eskbanker's reply is accurate, it's not the whole story:
Note that Al Rayan update you every quarter by post with continued confirmation of the 'expected profit' rate.

In the event the expectation falls below the initial offer rate you are allowed to withdraw your money and be paid the initial rate inclusive up to date.

https://www.alrayanbank.co.uk/savings/compare-al-rayan-banks-savings-accounts/a-guide-to-expected-profit/

"If, for some reason, the Bank were unable to meet the expected profit rate it had quoted on its fixed term deposit products, the customer would be notified and given the option of ending the agreement, with their original deposit and profit earned to date intact, or they could accept a lower “expected profit rate” moving forward."