Is it worth locking away savings for 6 months?

howryoo

I recently drew funds from my flexible ISA (which I think was paying around 0.85%) into an instant saver paying 1.35%.

Not a great improvement, but I am stumped and hesitant to commit into a 1 year fixed rate.  Is it worth locking away some in a 6 month fixed rate?

I was thinking maybe 50% in a 6 month account and 50% in a 1 year. 

Keeping it in an ISA isn't as important as it once was for me (higher rate), as I'd probably have gone for a fixed rate ISA paying 2.05 - 2.10%.

Not sure what to do now though, seeing rates are inevitably going to rise?

Swipe

Why would you do that when there are plenty more BOE rate hikes due to come?

refluxer

howryoo said:

I was thinking maybe 50% in a 6 month account and 50% in a 1 year. 

I'm currently considering a 90 day notice account @ 2.02% with OakNorth which I think is a better option than 6 months with Atom at the same rate, considering rates are steadily rising. That would essentially give you a 3 month fix if you gave notice straight away and you could consider your options again in 3 month's time. As the rate for that notice account is variable then there's also the possibility that the rate could increase although I don't know how likely that is in practise.

Bridlington1

The way I look at it is this. If you think that the interest rate on your easy access account will average less over the next 6 months than the 6 month fix, then use the fix. If not keep it in easy access.

At the moment I'm keeping everything easy access. I have a series of regular savers, which I'm drip feeding the contents of my easy access account into and then closing the regular savers as and when the easy access rates begin to beat the regular saver rates. A lot of regular savers pay more than the the top 6 month fixes anyway and are often variable so it's worth looking at.

There's also the option of some current accounts. Nationwide for example pays 5% for the first 12 months so if you are eligible go for that as it can't be beaten at the moment.

howryoo

Thanks for your replies.  Not sure what to do.

An account with 3 months' notice or 95 days etc. might seem sensible.

So deposit funds, then followed by giving notice shortly after.  However, do you need to withdraw after you give notice?  What are peoples experiences and with which institutions?

steveksullivan

howryoo said:

However, do you need to withdraw after you give notice?  What are peoples experiences and with which institutions?

I too was looking at 6 month accounts yesterday and came to the same conclusion - will be doing 90 day notice instead.

No you dont need to withdraw just cancel the instruction ......

howryoo

May also consider a notice account.

Looks like Shawbrook's now offering 1.52% (up from recent rise to 1.40%).

Wonder when Atom will increase it's 1.35% offering?

jimexbox

steveksullivan said:

howryoo said:

However, do you need to withdraw after you give notice?  What are peoples experiences and with which institutions?

I too was looking at 6 month accounts yesterday and came to the same conclusion - will be doing 90 day notice instead.

No you dont need to withdraw just cancel the instruction ......

Zopa have a 95 day notice @ 1.85%. You can give notice immediately, while adding to the pot whenever you like. Rates are also increased automatically and you can cancel the notice at anytime 

steveksullivan

howryoo said:

Looks like Shawbrook's now offering 1.52% (up from recent rise to 1.40%).

jimexbox said:

Zopa have a 95 day notice @ 1.85%. You can give notice immediately, while adding to the pot whenever you like. Rates are also increased automatically and you can cancel the notice at anytime 

Is there any reason you are both suggesting other accounts when Oaknorth have  2.02% for 90 days?

jimexbox

steveksullivan said:

howryoo said:

Looks like Shawbrook's now offering 1.52% (up from recent rise to 1.40%).

jimexbox said:

Zopa have a 95 day notice @ 1.85%. You can give notice immediately, while adding to the pot whenever you like. Rates are also increased automatically and you can cancel the notice at anytime 

Is there any reason you are both suggesting other accounts when Oaknorth have  2.02% for 90 days?

I'll definitely give Oaknorth a look in August after the next rate rise filters into savings rates.

Currently have instant access, 31 and 95 day notice accounts. Notice on both accounts given. Which will be moved around whoever offers the best rates.

Edit - their 35 day is a shocking rate. 90 day looks excellent.