Shawbrook 5 year 1.25% fixed bond

meat_n2_reg

Hello

I currently have approx 60k in a marcus instant account now only paying 0.5%

I'm thinking of keeping 20k in marcus for a emergency fund and putting 40k in the 5 year fixed 1.25% Shawbrook bond

Just not sure if 5 years is too long a fix for 1.25% ?

Would welcome your thoughts

Regards Steve

Retireby40

Personally 5 years for 1.25% would be a little low for me. If I was locking it away that length of time I would expect more.

The interest you gain isn't great. 

Would you not consider putting it or some of it in something like the S&P 500 if your prepared to lock it away for 5 years or so? With annual gains of between 5-8% could be much better.

colsten

Retireby40 said:

Would you not consider putting it or some of it in something like the S&P 500 if your prepared to lock it away for 5 years or so? With annual gains of between 5-8% could be much better.

These annual gains are not guaranteed and you might lose money.

As to OP's question: Personally, I would not fix for 5 years on 1.25%. Ever the optimist, I would probably put £50K into Premium Bonds, and distribute the rest across a number of Regular Saver accounts. I would only consider investments if I can lock the money away for considerably longer than 5 years

Retireby40

colsten said:

Retireby40 said:

Would you not consider putting it or some of it in something like the S&P 500 if your prepared to lock it away for 5 years or so? With annual gains of between 5-8% could be much better.

These annual gains are not guaranteed and you might lose money.

As to OP's question: Personally, I would not fix for 5 years on 1.25%. Ever the optimist, I would probably put £50K into Premium Bonds, and distribute the rest across a number of Regular Saver accounts. I would only consider investments if I can lock the money away for considerably longer than 5 years

They aren't guaranteed thats true and you maybe find you need to hold on for another year or two but I would expect to make more money on that than sticking it away for 5 years to make £2000 odd quid. Locking your money away for 5 years to what? Pay for 1 decent summer holiday? It just isn't worth it for me. Guaranteed yes. But anyone looking to make their money work for them would probably find a better way.

Consumerist

I'm a bit wary of longer-term fixed (non-ISA) savings accounts.

Because you don't have access to the funds until maturity, the interest earned is all paid in the final year as far as HMRC is concerned and this could knock quite a hole in the PSA for that year.

grumiofoundation

Consumerist said:

I'm a bit wary of longer-term fixed (non-ISA) savings accounts.

Because you don't have access to the funds until maturity, the interest earned is all paid in the final year as far as HMRC is concerned and this could knock quite a hole in the PSA for that year.

You can get the interest paid monthly, annually or on maturity for a lot of longer fixed term accounts.

 I agree on the risk of lack of accessibility. 

NottinghamKnight

Consumerist said:

I'm a bit wary of longer-term fixed (non-ISA) savings accounts.

Because you don't have access to the funds until maturity, the interest earned is all paid in the final year as far as HMRC is concerned and this could knock quite a hole in the PSA for that year.

Would be a nice problem to have nowadays.