Fixed or easy access

refluxer

oz0707 said:

That is a consideration penalties for early access. I though with these type of 1 year fixes you can usually withdraw with loss of interest?

Yes, that's right - the 60/90/120 days mentioned above are actually the interest penalties for transferring or withdrawing from a Fixed Rate ISA before maturity - the longer the fix, the higher the penalty.

masonic

oz0707 said:

That is a consideration penalties for early access. I though with these type of 1 year fixes you can usually withdraw with loss of interest?

Most fixed accounts do not permit access outside of extraordinary circumstances (e.g. terminal illness). Cash ISAs must allow access, so fixed ISAs can be accessed subject to penalty, and Nationwide is a rare example of a provider that applies this to standard fixes too.

RobM99

How about a 90 day notice account? A 'sort-of' fix .

Expotter

RobM99 said:

How about a 90 day notice account? A 'sort-of' fix .

Could be, but at the moment 90 day notice rates are same or lower than easy access.

refluxer

Yep - notice accounts will have to pay 3%+ now in order to become a viable option again

RobM99

Expotter said:

RobM99 said:

How about a 90 day notice account? A 'sort-of' fix .

Could be, but at the moment 90 day notice rates are same or lower than easy access.

...which shows how fluid rates ae at the moment....

noh

masonic said:

oz0707 said:

That is a consideration penalties for early access. I though with these type of 1 year fixes you can usually withdraw with loss of interest?

Most fixed accounts do not permit access outside of extraordinary circumstances (e.g. terminal illness). Cash ISAs must allow access, so fixed ISAs can be accessed subject to penalty, and Nationwide is a rare example of a provider that applies this to standard fixes too.

Nationwide do not offer early withdrawal on the currently available fixed rate accounts. They used to with previous offerings
https://www.nationwide.co.uk/savings/help/bond-differences/

Shedman

oz0707 said:

That is a consideration penalties for early access. I though with these type of 1 year fixes you can usually withdraw with loss of interest?

Fixed ISAs yes as the rules require it but the savings institution can set the number of days lost interest.  For fixed non-isa savings then almost invariably no break clause even with a penalty (except for a few exceptions like Nationwide I believe)

Albermarle

Desk said:

jaypers said:

lohr500 said:

@Desk To add to my earlier post I will definitely bite the bullet in November once the PB money comes through and grab the best of what is available at the time, rather than waiting too long and finding I miss out.

I don't understand enough about what impact yesterday's Govt circus show will have on the base rate and if it will result in a slow down on savings rate rises.

I think the trick is going to be to get the balance right between interest rate and the length of the fix. Then if rates do continue to increase at least there is the opportunity to jump ship and start again.

I certainly wouldn’t consider anything longer than a 1 year fixed.

Why? The BoE’s stated aim is to get inflation back down to around 2.5% at which point they will ease off on the base rate.

Inflation may be stickier in U.K. than elsewhere, but a global recession is on the cards and the suggestion is that the Fed may be reaching the upper limits of where it’s going to hike the base rate.

In the U.K., the base rate hikes have a political ceiling of what the country is able to stomach around mortgages, and it will take a good few years for those markets to adjust to QT and the return of rates.

Meanwhile, as long as you don’t need the money, you can have a sum locked away for five years at a guaranteed 5 per cent, which was the historical average base rate and comes with none of the volatility or uncertainty of the stock market.

This is a good point. One possible scenario over the coming months, is that easy access and one year fixed rates go up again, but 3 to 5 year fixes do not move, or even start to go down. So a longer fix could have a worse rate than a shorter one, as the long term view seems to be that interest rates will come down again in the long term ( but nobody knows really of course) 

refluxer

noh said:

Nationwide do not offer early withdrawal on the currently available fixed rate accounts. They used to with previous offerings
https://www.nationwide.co.uk/savings/help/bond-differences/

I also mentioned this recently and someone pointed out that they do still offer fixed rate bonds that you can open in a branch that allow early withdrawals with a penalty, but the rates are a lot lower so unlikely to be of any interest to most, here