NS&I savings to ...where?

RG2015

cloud_dog said:

NS&I Income Bonds question.... (sorry to side step the maths lesson) 

Does anyone know the minimum amount you can leave in the NS&I Income Bond account?

I know the minimum payment is £500, so it would not be unreasonable to assume the minimum balance is also £500 but, thought I'd ask the question, as I didn't really want to leave £500 there; a pound would be ok. 

I'll be moving me 'ole ma's money to another account but thought I'd leave this one open as if anyone is likely to increase rates when the wind changes direction, hopefully NS&I will. 

Yes, £500 minimum balance. Best alternative now is about 1% so £500 at 1% would be an effective cost of £5 per annum to keep it open.

whitesmith

You could open a Direct Saver account which is very easy to do once you log on - that has a minimum balance of £1. You can then close your Income Bond account

if interest rates increase you simply log on again and open a new Income Bond account or whatever you want to do

Eco_Miser

If you/your 'ole ma have any Premium Bonds, that would keep the login live and you could close the Income Bonds account.

Does anyone know how long NS&I keep you registered for online access if you don't hold any of their products?

Sailtheworld

lisyloo said:

Sailtheworld said:

lisyloo said:

Sailtheworld said:

lisyloo said:

unkle said:

Retireby40 said:

whitesmith said:

...or have your central  heating on for 20 milliseconds less a week ...

Correct. The interest rates these days arent worth the hassle moving around. Best thing can do is reduce spend by about 1% and that will make the difference. See people asking about swapping £1000 in an account paying 0.01% to something 0.03%. For the hassle involved what is the point.

Only worthwhile if you've 100's of 1,000's - otherwise I agree, 

I always "do the maths".

So for example 0.5% on £40K is £200 which I'd consider worthwhile for say 30 mins effort.

If people really do want to hold lots of cash they may as well keep true emergency money in instant access and forget about the rate. Then lock the rest away in 1, 2 year accounts etc. Every 6 months or so check what's available and make adjustments as necessary - that's a true 30 minutes effort.

I get the feeling though that, for a lot of people, it's a more time consuming hobby involving daily trawls of best buy tables and additional research. It's a waste of headspace apart from anything else.

Why on earth would a money saver just "forget" about the rate.

I don't think every 6 months is a good strategy for an MSE.

You need to respond to events in either direction.

Not anything like daily but if (for example) there's an emergency interest rate cut then that's the time to keep an eye on things.

Lots of MSE's aren't doing it just for the pennies, but some of us follow events and find it interesting so it is a sort of hobby rather than a chore.

Personally I would only look if I become aware of market movements or my circumstances change, so painting us as anoraks is a bit unfair :-) but some of us do actually enjoy keeping abreast of things MSE. If you enjoy something it's not a core.

I browse the weekly email so that should be enough to tell me if the savings market is changing or there's a great offer available.

Personally my threshold is about £35 which would relate to the hassle.

You'd forget about the rate on real emergency savings because that would be a relatively small amount. Any interest gained by switching more than every six months would be trifling. You put the rest in 1, 2, 3 year accounts.

That means rates are only of interest on account anniversaries and whenever you have a look at instant access accounts for emergency fund. Literally 30 minutes a year.

If you're doing anymore than that it's because it's a hobby (fair enough) or a severe case of FOMO in case there's an interest rate move up when cash is fixed.

Isn’t emergency cash 6 months spending? That’s not what I’d call a relatively small amount for a couple.
i wouldn’t want to put my “holiday fund” in a 1 year fixed. I might want a long haul holiday before that and i’d Want access. Some companies don’t accept credit cards for the main payment (only deposits).
I don’t think what you are talking about fits my requirements. Perhaps you are being too general? Or making assumptions?

but I guess “I’m out”, not sure I’m that interested in what you think of what other people do. I’m clear on my requirements and they make sense.
im only looking because of an event (an inheritance) I don’t normally spend a lot of time on it.

you haven’t provided any solid reason for anyone to change their behaviour, so your opinion is irrelevant and not useful.

Sorry, I wasn't trying to build a personalised savings plan just for you so obviously neglected to build in a pot for that long haul holiday you might want. Of course I'm being general.

An emergency fund of, say, £10k could simply go into the highest interest rate instant access account. I doubt it's worth anyone's time to immediately start daily checks of interest rates, qualifying criteria and so on let alone the hassle of moving accounts. Checking a couple of times a year should be more than adequate - what's the worse that can happen? You're on the best rate possible and the day after it gets bettered? You might miss out on £20 in a year. 

Anything else gets popped into term accounts and it's easy to diarise a meeting with yourself to have a look at what's about around the time of the expiration of the term.

There are plenty of solid reasons to take an approach like this...

- for a start you're guaranteed to be on the best instant access rate twice a year, you're guaranteed to be on the best 1 year rate once per year and so on. What's not to like?
- in recent years, as rates fell, total return would have been higher. Plenty of people wishing they'd taken those pitiful 5 year rates now. Of course that's luck to an extent and it could go the other way but there would be no harm in a bit more focus on when the money might be spent and choosing an appropriate term - chasing instant access rates for cash that might not be needed for a decade or two isn't a sensible approach
- frees up time & headspace to do / think about more interesting things (accepting some people treat this as an interesting pastime)
- diminishing returns. When rates were higher in the nineties it wasn't that unusual to see big gaps between rates on offer - 2% - 3% difference. Those days are gone and, IMO, aren't coming back and I'm rather bemused by the depths of discussion about rate differentials of 0.2% - 0.3% difference. They should only really matter at term renewal - if not I'd question whether someone either has too much cash or, at the opposite end of the scale, whether there might be more effective ways to increase income.

FWIW. I don't really have an emergency fund or much bother with cash. At the start of each tax year I put the maximum into a SIPP. That wipes out my savings. I then start saving for the following year's pension contribution and these savings also act as a proxy emergency fund. Currently in a notice account at 0.5% with Nationwide who I bank with. I could move this two or three times a year and make an extra £40/ year but I like being able to see it in one online banking system and it's only £40. Things like holidays I mentally spend in advance and it stays in the current account - some portion of it earns 0.25% but I can't see the point of spending 30 seconds let alone 30 minutes on the interest on a £5k float.

coachman12

Well, that was a lesson in hiding some sort of apology in a huge post !!
Personally I agree that lisyloo has the right to have his/her own views and is best placed to understand the personal situation best, without nebulous lectures which are just irrelevant to the actuality of what someone else is much better placed to judge and understand. 

Sailtheworld

coachman12 said:

Well, that was a lesson in hiding some sort of apology in a huge post !!
Personally I agree that lisyloo has the right to have his/her own views and is best placed to understand the personal situation best, without nebulous lectures which are just irrelevant to the actuality of what someone else is much better placed to judge and understand. 

The apology wasn't hidden. The first word was sorry. I'm aghast and shamed that I proposed a relatively simple approach to how to deal with cash without checking everyone's holiday plans first.

You actually proposed a not dissimilar approach not so long ago (as did Thrug). I distinctly remember because I was horrified to find myself in agreement. 

coachman12

Pretty huge and defensive post though, eh ? 

Sailtheworld

coachman12 said:

Pretty huge and defensive post though, eh ? 

Yes, I was a bit put out when it was claimed hadn't provided any solid reasons why anyone should change behaviour. I didn't think this was entirely justified. However, I thought I'd take the comment on board in the good spirit I'm sure it was intended and provide further reasoning without taking the hump. Apart from the tiniest leg pull about holidays I think I managed to do that. Whether anyone agrees is another matter and outside of my control.

Thanks for the concern.

apb123

I am keeping mine in Premium Bonds. It is still 1% on average  and tax free...where else would you put it, unless you are buying a house. I am saving in tPremium Bonds and review the lie of the land next year. Who knows where we will be then.

Alternatively if you need something, new boiler, car.. I would just buy it.

garmeg

apb123 said:

Alternatively if you need something, new boiler, car.. I would just buy it.

That's very generous. I'll have a Guilia Quadrifoglio Nurburgring in red please.