The Top Fixed Interest Savings Discussion Area

wmb194

CheekyMikey said:

Band7 said:

CheekyMikey said:

Band7 said:

CheekyMikey said:

M4rtyman said:

Am I correct in saying, that the 5 year Fixed at Gatehouse, can be paid out monthly, and to your linked account? So even though my initial investment is tied up for five years, I can spend the interest when ever I want? I quite like the idea of having that guaranteed extra income for the next five years

I have opened a Gatehouse 5 year fixed for exactly this reason…£75k will generate a £300 a month income which will be very useful in topping up my db pension. I wasn’t able to find another product which allows you to take out monthly interest…

Lots and lots of other monthlies but none with quite as good a rate at Gatehouse. Not at the moment, anyway.

Yes, they pay interest monthly but as far as I can tell from their websites, they do not allow you to withdraw the interest monthly. I only looked at the ones paying the better rates but only Gatehouse allow monthly withdrawals of interest to a nominated account..

I don‘t believe this. The entire point of monthly interest on fixed rate accounts is to pay an income to a different account, usually the nominated account. A random spot test confirms this

I must be misunderstanding when they say no withdrawals allowed…although Vanquis and Tesco seem to be the only other ones who allow monthly interest to nominated accounts if I read it correctly

Having interest paid away isn't a withdrawal. 'Withdrawal' refers to the principal.

Most savings bond allow - often require - interest to be paid away either monthly or annually. It isn't a rare option.

buyhighselllow

I have 7 months left on a 1 yr fixed rate cash isa bond paying 1.6% with Shawbank. They are offering the same product now at 3.65%..I am wandering if it is worth taking the hit of loss of 3 months interest and asking to transfer to their latest product..any thoughts ?

25_Years_On

buyhighselllow said:

I have 7 months left on a 1 yr fixed rate cash isa bond paying 1.6% with Shawbank. They are offering the same product now at 3.65%..I am wandering if it is worth taking the hit of loss of 3 months interest and asking to transfer to their latest product..any thoughts ?

Depends how much it is. For every £10000 you have you would be about £80 better off after 7 months which will reduce by about £20 for every month you wait. (rough calculation only).

buyhighselllow

25_Years_On said:

buyhighselllow said:

I have 7 months left on a 1 yr fixed rate cash isa bond paying 1.6% with Shawbank. They are offering the same product now at 3.65%..I am wandering if it is worth taking the hit of loss of 3 months interest and asking to transfer to their latest product..any thoughts ?

Depends how much it is. For every £10000 you have you would be about £80 better off after 7 months which will reduce by about £20 for every month you wait. (rough calculation only).

over 30K. I'm assuming I would have to take out a new 1 year term rather than just get 7 months at the higher rate

Band7

Certainly seems to be worth moving to a different product - though your maturity date would obviously be a few months later than on the existing account. You also can get better than 3.65% for a 1 year ISA fix - see https://moneyfacts.co.uk/isa/1-year-fixed-rate-isas/?quick-links-first=false

For an ISA with £10,000:

• interest @1.65% for the next 212 days (roughly 7 months) is £92.93
• 90 day interest penalty is £39.45
• thus anything that pays more than £92.93 minus £39.45 in the next 212 days could be of interest
• a 1 year 3.65% account would pay £212 in the next 212 days but will obviously only mature in 365 days
• a 1 year 3.90% account would pay £226 in the next 212 days but will obviously only mature in 365 days

Are you sure you benefit from having your money in a cash ISA? As there are non-ISA 1-year fixes paying up to 4.6%.

buyhighselllow

Band7 said:

Certainly seems to be worth moving to a different product - though your maturity date would obviously a few months later than on the existing account. You also can get better than 3.65% for a 1 year ISA fix - see https://moneyfacts.co.uk/isa/1-year-fixed-rate-isas/?quick-links-first=false

For an ISA with £10,000:

• interest @1.65% for the next 212 days (roughly 7 months) is £92.93
• 90 day interest penalty is £39.45
• thus anything that pays more than £92.93 minus £39.45 in the next 212 days could be of interest
• a 1 year 3.65% account would pay £212 in the next 212 days but will obviously only mature in 365 days
• a 1 year 3.90% account would pay £226 in the next 212 days but will obviously only mature in 365 days

Are you sure you benefit from having your money in a cash ISA? As there are non-ISA 1-year fixes paying up to 4.6%.

Thanks
I want to keep this as an ISA at the moment otherwise I will be taxed on interest over £1000 from my accumulated holdings

Millyonare

t1redmonkey said:

janusdesign said:

t1redmonkey said:

M4rtyman said:

Am I correct in saying, that the 5 year Fixed at Gatehouse, can be paid out monthly, and to your linked account? So even though my initial investment is tied up for five years, I can spend the interest when ever I want? I quite like the idea of having that guaranteed extra income for the next five years

Correct, you can indicate what happens with the interest during the application phase, either have it paid into the same bond, or paid to an external account.

just to add that with Gatehouse, you can amend your interest options at any time in the fixed-term period - I have a 1-Yr fix that I think was originally paying annually back into the Gatehouse account, but from the website, you can amend it to either monthly/annually and/or keep it in the account or pay it out to a nominated account... it's now paying interest monthly back to my nominated account.

note that not all fixed-rate accounts will do this - some (most?) will commit you at the application phase and you cannot change it.

That's very handy to know, thanks

Yes, Gatehouse's flexibility is excellent, from both an account-management and tax angle.

Krakkkers

What is the legal position if they don't pay the "expected" profit? Is it guaranteed?

kaMelo

Krakkkers said:

What is the legal position if they don't pay the "expected" profit? Is it guaranteed?

The legal position is that it's not guaranteed, only an expectation.
What options you have should they estimate a return less than the expected rate are detailed within the terms of the account.

intalex

Band7 said:

For an ISA with £10,000:

• interest @1.65% for the next 212 days (roughly 7 months) is £92.93
• 90 day interest penalty is £39.45
• thus anything that pays more than £92.93 minus £39.45 in the next 212 days could be of interest
• a 1 year 3.65% account would pay £212 in the next 212 days but will obviously only mature in 365 days
• a 1 year 3.90% account would pay £226 in the next 212 days but will obviously only mature in 365 days

Sorry, but just to avoid misunderstanding for anyone else trying to apply this logic in their decision making, can I suggest a slight rephrase of the 3rd bullet to:

• thus anything that, after deducting £39.45, pays more than £92.93 in the next 212 days could be of interest

This implies that anything that pays more than £132.38 (i.e. £92.93 + £39.45) over the next 212 days may be of interest.