Savings rates are increasing

SouthCoastBoy

Both Nationwide and Virgin Money have a 4% 1 year fixed term bond, going to have to move some money around!

mark55man

Is there a way of catching the interest rate rises with funds.  I have most of my mortgage neutral fund in my SIPP (to drawdown when I retire and stop earning the mortgage payments), and I only need to earn 2.1% to exceed the interest accruing.  My worry with funds is that they are more volatile than the underlying instruments.  This would be needed within a 5 year type timescale so short duration would be my thought 

cloud_dog

I am in similar circumstances, although sightly smaller timescale (hopefully another 3 years).

I am not suggesting what I have done is the best option, but it is one I am comfortable with, and one which helps us achieve the goal in the next few years.  For the early retirement phase (5.5 years before my DB kicks in) and for the mortgage repayment, I (we) hold funds totalling c. 25% of the portfolio value.  As we hold c. 75% in cash we have recently transferred the SIPPs to Vanguard who appear to be paying 2% on cash held.

They pay whatever interest they receive from their bankers minus 0.2%; so I can only assume they are receiving 2.2% at present.

It is a little unclear if they apply their standard platform fees on the cash held on account.  There is a place in their literature which says they don't and another which say they do.  For obvious reasons I am monitoring the charge amount applied to the accounts.

whattochoose

SouthCoastBoy said:

Both Nationwide and Virgin Money have a 4% 1 year fixed term bond, going to have to move some money around!

I've taken out this one year bond and asked that interest is credited each month. 
The account states that money cannot be taken out during the account's duration.
My first interest payment is on the 8th November. 
I'm clear that capital can't be touched, but am I right in thinking interest earned can also not be withdrawn or nominated to be paid into another account?
Thank you.

SouthCoastBoy

Not sure who you have taken out the bond with  but here are the rules taken from the nationwide website

"If you choose for interest to be paid monthly:

Interest is paid at the end of each month, at the end of the fixed term and on the date the account is closed. The interest must be paid into;

a different Nationwide current or savings account (as long as it is possible to make interest payments into that account)

a current account with another building society or bank.

If you open your account towards the end of the month your first interest payment may not be paid until the end of the following month. The final interest payment, when the account matures, is added to the Fixed Rate Bond."

whattochoose

Thank you for that information.