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The Top Fixed Interest Savings Discussion Area
Comments
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Just noticed that Lloyds Bank have a new fixed rate account where they pay the interest upfront into your nominated account for you to use as you wish. Rate for club customers is not great. - 4.2%. Maybe an attempt to get round the increase on savings tax rate next financial year. The more I think about it the worse deal it becomes.
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Lloyds Upfront
Just because it's so weird and I think it'd be funny I'm tempted to open one just to deposit the minimum but it might make sense if you're in a situation where you know/anticipate that you'll move into a higher tax band next tax year.
We could also talk about the time value of money and reinvesting the interest but I don't think it makes much difference at this relatively low rate.
https://www.lloydsbank.com/savings/upfront-interest-online-fixed-bond.html
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might make sense if you're in a situation where you know/anticipate that you'll move up the tax bands next tax year.
A lot of people will be moving from 20% to 22% or 40% to 42% on savings interest next year, so this account may suit them, although the rate is rather low.
Eco Miser
Saving money for well over half a century1 -
Lloyds Upfront
That would be too marginal at the offered rate versus the best in the market*, I'm thinking from being e.g., a non-taxpayer to basic or higher rate.
*5.12% but via its MBNA brand even Lloyds is offering 5.01% for one year.
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Lloyds Upfront
That's true, but considering that some posters concentrate on saving tax, I'm sure there would be some who would take that tax saving without considering paying tax on a a higher rate would be better.
Eco Miser
Saving money for well over half a century1 -
I've just been comparing buying low-coupon gilts fixed rate bank bonds with fixed rate gilts. It seems these bonds aren't competitive in relation to Gilts for those who pay tax on savings, because most of the gain on these gilts is via capital gain, so you would need around 6% return on a bank bond to make it worthwhile for a basic rate taxpayer. Even for non taxpayers the flexibility of being able to sell the gilt before maturity makes it superior IMO. These are excluding stockbroker charges and spread though. (Subtract ~0.1% for half the spread). Here's the Treasury 0.125% 2028 gilt
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The dirty price is more like 94.85 mind.
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When I put that price into giltsyields.com it comes up with a grossed up yield of 5.632% (for a 22% taxpayer)
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Yes you're right, I must not have pressed calculate again, after putting the incorrect maturity date in.
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Hi, I am looking for a one-year fix, and I see Afin Bank is at the top with 5.15%; has anyone used them, and what are your thoughts, good or bad?
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