Exhausted all options? Where to save my money?

MoneyMan01

d63 said:

my only small concern regarding the premium bonds option was that assuming you buy them before the end of this month because the first draw you will be eligible for is september and the last in march next year that is only a total of 7 draws available over an 8 month period so that headline rate of 1.4% they quote on the website would be reduced by 7/8 to around 1.23% and in practice most likely lower than that because of the peculiar way the prizes are distributed, but that is not something i feel at all comfortable explaining!  anyway the upshot being that despite any prizes are free of tax unless you feel lucky the monthly income bond route at 1.16%AER is probably the best option and certainly better than the 1% AER of the direct saver account which only pays out the interest once a year.

but as to how precisely one makes a withdrawal from the nationwide cash isa and subsequent paying back in, is not something i have personal experience of and prior to you raising the question i simply assumed you do an ordinary withdrawal and then a standard deposit again. but in view of the potentially large sums involved maybe its best you ask the nationwide people to be certain, or maybe someone else here can advise.

I guess. But even having £50,000 in the Premium Bonds for 7 draws *should* *potentially* be better than 0.05% that the £60k in the ISA is currently getting.

Of course, I could just put the entire £60k in the Income Bonds at 1.16% and then put the total back into the ISA before April 2021.

Or put the entire £60k into a savings account that pays interest into that account monthly. Do any? If so, who are they with and at what rate?

Of the 3 options above I am unclear as to whether it would even be worthwhile going for option 3, when option 2 would just be the interest of 1.16% being paid into a different account. Of course, if there was a savings account that paid interest into the same account monthly, I am presuming that the interest rate would be on the entirety of what is in the account (including the interest paid), each month?

d63

TheDarkKnight93 said:

d63 said:

my only small concern regarding the premium bonds option was that assuming you buy them before the end of this month because the first draw you will be eligible for is september and the last in march next year that is only a total of 7 draws available over an 8 month period so that headline rate of 1.4% they quote on the website would be reduced by 7/8 to around 1.23% and in practice most likely lower than that because of the peculiar way the prizes are distributed, but that is not something i feel at all comfortable explaining!  anyway the upshot being that despite any prizes are free of tax unless you feel lucky the monthly income bond route at 1.16%AER is probably the best option and certainly better than the 1% AER of the direct saver account which only pays out the interest once a year.

but as to how precisely one makes a withdrawal from the nationwide cash isa and subsequent paying back in, is not something i have personal experience of and prior to you raising the question i simply assumed you do an ordinary withdrawal and then a standard deposit again. but in view of the potentially large sums involved maybe its best you ask the nationwide people to be certain, or maybe someone else here can advise.

I guess. But even having £50,000 in the Premium Bonds for 7 draws *should* *potentially* be better than 0.05% that the £60k in the ISA is currently getting.

Of course, I could just put the entire £60k in the Income Bonds at 1.16% and then put the total back into the ISA before April 2021.

Or put the entire £60k into a savings account that pays interest into that account monthly. Do any? If so, who are they with and at what rate?

Of the 3 options above I am unclear as to whether it would even be worthwhile going for option 3, when option 2 would just be the interest of 1.16% being paid into a different account. Of course, if there was a savings account that paid interest into the same account monthly, I am presuming that the interest rate would be on the entirety of what is in the account (including the interest paid), each month?

with £50k of premium bonds in for 7 draws you would have to be extraordinarily unlucky not to beat the approx £30 a year the nationwide is paying you since even one win would pay you £25. but bottom line is premium bonds are iffy and offer no guarantees except for your money back when you want it. i have the max amount myself and in a typical year there would be 2 months of 0 wins but 2 months of £100 won so that the average amount won in the last 3 years was 1.25%, 1.15% and 1.25% which is pretty much what one would expect. and while it is, or rather was, possible to do better than that, its ok for me since i don't have to fret about paying any income tax on that.

so anyway unless someone else has a better idea i would suggest the income bonds is your best option here and simply not worry about trying to compound the interest since even a full year of £60k at 1.16% earns around £700, the interest on the interest is only going to be an extra £8 or so. 

MoneyMan01

d63 said:

with £50k of premium bonds in for 7 draws you would have to be extraordinarily unlucky not to beat the approx £30 a year the nationwide is paying you since even one win would pay you £25. but bottom line is premium bonds are iffy and offer no guarantees except for your money back when you want it. i have the max amount myself and in a typical year there would be 2 months of 0 wins but 2 months of £100 won so that the average amount won in the last 3 years was 1.25%, 1.15% and 1.25% which is pretty much what one would expect. and while it is, or rather was, possible to do better than that, its ok for me since i don't have to fret about paying any income tax on that.

so anyway unless someone else has a better idea i would suggest the income bonds is your best option here and simply not worry about trying to compound the interest since even a full year of £60k at 1.16% earns around £700, the interest on the interest is only going to be an extra £8 or so. 

Noted. Thank you for the advice.

MoneyMan01

Bringing this thread back up so it includes everything I have gone through previously to save us all asking / answering the same questions and to prevent just opening another thread.

I have an update:

I ended up moving the ~£60,000 to NS&I Income Bonds. I've now got around £70,000 in there.

With the news that the rate on that account is about to be reduced, where is best for me to move this money now?

I am thinking of putting £50,000 into Premium Bonds and then the remaining amount in the highest paying savings account.

Don't want to go down the investment route right now given how uncertain times are.

Is the above plan the correct call at the moment? Is there anything else any of you are doing / would recommend?

Bravepants

My emergency fund is in Premium Bonds and I still have a Marcus account for "long term" cash that I let build up while I consider what to do with it...eventually it will either go into Premium Bonds as it builds up, or I may buy more Added Pension in my DB scheme, or I may pay it into my S&S ISA. If you don't have anything in Premium Bonds I would stick it in there, unless you have any use like the above for it.

Another_Saver

TheDarkKnight93 said:

Bringing this thread back up so it includes everything I have gone through previously to save us all asking / answering the same questions and to prevent just opening another thread.

I have an update:

I ended up moving the ~£60,000 to NS&I Income Bonds. I've now got around £70,000 in there.

With the news that the rate on that account is about to be reduced, where is best for me to move this money now?

I am thinking of putting £50,000 into Premium Bonds and then the remaining amount in the highest paying savings account.

Don't want to go down the investment route right now given how uncertain times are.

Is the above plan the correct call at the moment? Is there anything else any of you are doing / would recommend?

Fine, especially if you're saving for the near term, house deposit, or your economic situation may not be that secure.

But the times are always uncertain. Read any newspaper, any financial times ever, watch any YouTube investing video ever, listen to any of investing podcast or any Radio 4 show about investing, any book, any journal article ever - everyone has always said that the times are uncertain. When people aren't saying that, you know the market must be wildly overvalued. It's one of those meaningless phrases like "with everything going on right now" "given the times we live in" "the way the country's going" "the state of the world at present".

That £20k gap between your PB max and total would max out a stocks and shares ISA. IMHO if you don't need this for at least the next decade or so,  Open an iWeb S&S ISA, stick the £20k in, buy a global equity index fund like HSBC FTSE all world or vanguard global all cap, then just leave it.

MoneyMan01

Like I say, I am going to put £50,000 in premium bonds but unsure what to do with the remainding £20,000?

I would still like it to be easy access as I will need to transfer the whole amount back into my cash ISA next March so I can keep the tax wrapper I have built up in that (just shy of £80,000).

What is the Marcus account and is that easy access? What % interest rate is that?

Any other suggestions on where I should put the additional £20,000 and the info on that would be appreciated.

MoneyMan01

Another_Saver said:

TheDarkKnight93 said:

Bringing this thread back up so it includes everything I have gone through previously to save us all asking / answering the same questions and to prevent just opening another thread.

I have an update:

I ended up moving the ~£60,000 to NS&I Income Bonds. I've now got around £70,000 in there.

With the news that the rate on that account is about to be reduced, where is best for me to move this money now?

I am thinking of putting £50,000 into Premium Bonds and then the remaining amount in the highest paying savings account.

Don't want to go down the investment route right now given how uncertain times are.

Is the above plan the correct call at the moment? Is there anything else any of you are doing / would recommend?

Fine, especially if you're saving for the near term, house deposit, or your economic situation may not be that secure.

But the times are always uncertain. Read any newspaper, any financial times ever, watch any YouTube investing video ever, listen to any of investing podcast or any Radio 4 show about investing, any book, any journal article ever - everyone has always said that the times are uncertain. When people aren't saying that, you know the market must be wildly overvalued. It's one of those meaningless phrases like "with everything going on right now" "given the times we live in" "the way the country's going" "the state of the world at present".

That £20k gap between your PB max and total would max out a stocks and shares ISA. IMHO if you don't need this for at least the next decade or so,  Open an iWeb S&S ISA, stick the £20k in, buy a global equity index fund like HSBC FTSE all world or vanguard global all cap, then just leave it.

True, I wouldn't be adverse to investing, however, in this instance I think the statement of uncertain times really is justified.

I would agree with your statement at any time prior to March this year, where I think it is fair to say that this pandemic is changing things every single day.

Granted, investing is always the unknown, however, with the world as it is I have been doing some research into investing and the general concensus is to hold fire for now, as more so than ever it is even more unpredictable right now.

That being said, I will look into your suggestion but I am still looking for suggestions on where to put the additional £20,000 in an easy access saver as I need to pay the money back into a previous cash ISA I have, in March (so I can get it back in before the next tax year), which has built up an £80,000 tax wrapper.

colsten

TheDarkKnight93 said:

Like I say, I am going to put £50,000 in premium bonds but unsure what to do with the remainding £20,000?

I would still like it to be easy access as I will need to transfer the whole amount back into my cash ISA next March so I can keep the tax wrapper I have built up in that (just shy of £80,000).

What is the Marcus account and is that easy access? What % interest rate is that?

Any other suggestions on where I should put the additional £20,000 and the info on that would be appreciated.

If you need instant access, your options for interest are rather limited: https://moneyfacts.co.uk/savings-accounts/. Currently available Marcus account isn't easy access; find more info on their website.

What rate does your ISA pay? Virgin have a limited edition 1 year ISA (matures 29/10/2021) for their current account holders. 1% AER. Accepts transfers in.

Their current account currently pays 2% AER but only on balances up to £1K. Plus, they have a switch offer worth around £150-£180.

MoneyMan01

If you need instant access, your options for interest are rather limited: https://moneyfacts.co.uk/savings-accounts/. Currently available Marcus account isn't easy access; find more info on their website.

What rate does your ISA pay? Virgin have a limited edition 1 year ISA (matures 29/10/2021) for their current account holders. 1% AER. Accepts transfers in.

Their current account currently pays 2% AER but only on balances up to £1K. Plus, they have a switch offer worth around £150-£180.

My Help to Buy ISA pays 1% (but that has a £200 month deposit limit).

The cash ISA has a 0.05% interest rate, the only way you can pay into more than 1 cash ISA in a tax year is by having them under the same building society (they are both under Nationwide). At least that’s how I understand it. 

I don’t want to mess around switching banks for the amount I’ll get out of this. 

Basically are my only options if easy access is to put it in the Saga 0.7% (0.15 fixed bonus included) easy access savings?

What’s everyone else doing if they had more than £50,000 in income bonds? Where are you putting the rest?