Where to invest 85k - 1 or 2-year Fixed Rate Bonds best?

Peregrina

Hi Folks,
I'd be really grateful for your advice on where to invest a recently-matured lump sum (which is my life savings and the interest is currently my sole income). 
I usually go for 3 year Fixed Rate Bonds but given the terrible investment panorama, which is forecast to worsen, I wonder whether people recommend a time-span of either: 1 year (if things are more likely to improve in 12 months) or 2 year (if things may get worse still after 12 months). Looking to maximise returns (I don't need access; yearly interest payments are fine).
Which? Magazine gives the following guidance:

1 Year Fixed Term Deposit

• Weatherbys (which is not one of their Recommended Providers, and securing this rate is dependent on holding another separate account with them too, which I don't currently have and haven't investigated as yet): 1%
• Which? Recommended Provider: Paragon Bank 1 yr: 0.6%

2 Year Fixed Term Deposit

• Weatherbys (same dual account stipulation): 1.25% 
• Ford Money Fixed Saver 90%
• Which? Recommended Providers list several reputable options, including Shawbrook: 0.85%

Your help and suggestions would be welcome and greatly appreciated.
Thanks in advance for any help you can provide!

JGB1955

£50K in Premium Savings Bonds.  I would put the rest in a 1 year bond but, then, I've never looked forward more than 2 years.  A 5 year fix (unless it was a mortgage) would be way outside my comfort zone.

Another_Saver

If this is your only source of income then I wouldn't want any to be tied up in fixed savers. £50k premium bonds and the rest in the best easy access accounts you can find.

eskbanker

Peregrina said:

the interest is currently my sole income

You'll only earn about £70-80 a month from that, which is obviously not enough to survive on, so what else are you living on?  Appreciation of your wider financial circumstances may help with more realistic guidance....

cricidmuslibale

My advice would be to put £50,000 in premium bonds, then drip feed up to £10,000 on a monthly basis from a current account or an easy access savings account into as many regular savers as you can reasonably manage (provided the regular savers pay at least 1% if fixed rate, 1.25% if variable rate) and then deposit the remaining £25,000 into a 3-year fixed rate account paying annual interest at 1% (or a little higher if available). Fixed rate accounts of less than 3 years duration all currently appear to be paying under 1% which I personally don't think is enough when your capital will not be available to you until the maturity date.

Bacman

Weatherbys were on MSE's list of recommended fixed-rate bonds a while back and are fine; however the best rates are for customers who have been with them for 4 or more years unfortunately.

csgohan4

Bacman said:

Weatherbys were on MSE's list of recommended fixed-rate bonds a while back and are fine; however the best rates are for customers who have been with them for 4 or more years unfortunately.

the rare occasion where loyalty pays

LobsterMemory

Another_Saver said:

If this is your only source of income then I wouldn't want any to be tied up in fixed savers. £50k premium bonds and the rest in the best easy access accounts you can find.

Would have thought the opposite -pocket a known amount rather than being at the whim of a/ interest rates where a fall could be announced the day after deposit and b/ an investment that could end up yielding nothing.

Albermarle

I'd be really grateful for your advice on where to invest a recently-matured lump sum (which is my life savings and the interest is currently my sole income). 
I usually go for 3 year Fixed Rate Bonds but given the terrible investment panorama,

It might seem a bit pedantic but it is best to get the terms correct to avoid any confusion.

To INVEST means to invest in risk based products in the hope of better returns , such as stocks and shares. 

What you are talking about is SAVING in low return savings accounts ( or premium bonds ) that are safe from risk.

In fact the 'Investment panorama' is actually quite healthy at the moment , but savings rates are low ( which is what I presume you meant )  

Minxy1

Lots of recommendations for premium bonds. Why is this? I don't know anything about premium bonds, why is this a popular choice? 

cattie

Premium bonds are mentioned because of the monthly cash prizes you could get. The prizes I've received over the past year on my premium bonds equate to around 1.4% interest, so better than most savings accounts, plus not being tied in to a fixed period, you can access the money whenever you like.