Total Sum in Cash Savings Accounts

DoneWorking

What's the maximum amount you would hold in cash savings accounts and bonds

Would you ever hold all of your cash in savings accounts 

Or would you always invest a proportion of your cash

eskbanker

It'll depend on a range of factors, e.g. accumulation or decumulation stage of life, anticipated spend levels, projected large purchases, overall asset mix, risk tolerance, etc, etc....

Albermarle

DoneWorking said:

What's the maximum amount you would hold in cash savings accounts and bonds

Would you ever hold all of your cash in savings accounts 

Or would you always invest a proportion of your cash

This subject has been discussed many times before. It can be anything from 5% to 100% in cash.
However most regular posters on this site seem to  favour investing most of their cash. 
Some will only keep emergency funds in cash, but most also keep a cash buffer for when investments are going through a rough patch. More cautious/older  posters may keep a higher % in cash - 30 %?
In any case it depends a lot on your personal circumstance.

bostonerimus

Cash is cash...anything invested with any risk is not cash. The amount you hold in cash ie in a current or saving account of some type depends on your circumstances. I think the initial goal would be for someone to have at least 6 months spending in cash for emergencies like losing a job or needing to replace a boiler. Then work up to having a year's spending in the bank. After that you should think of cash in saving accounts as part of your overall portfolio and maybe lock it up in a saving account ladder to get as much interest as you can.

If you are retired or approaching retirement it is probably a good idea to increase the amount you hold in cash so you can manage sequence of return risk. That might be 2 or 3 year's worth.

enthusiasticsaver

It would depend on circumstances.  We are living off DB pensions so stable income and for that reason we would not hold everything in cash.  Others would hold a percentage or even everything in cash if their income was more erratic or they are living off DC pensions. If you knew you were going to need access to it for example buying a property or  a new car then again you may or may not invest.  It also depends on the savers attitude to risk and investing. 

Silverbullet036

We have enough in cash to see us through to death whenever that comes. We have no interest whatsoever in the stockmarket and all its variety of investments. We can live comfortably on my pension and the rest is just there to be spent however we please or not , as the case may be. Dont give a stuff about inflation either

DoneWorking

I was looking into investing part of my cash funds through an IFA

At my risk level he was offering 3% return with the likelihood that it might drop by a considerable sum short term

That was just over a year ago

Then interest rates crept up

Since then I have allocated all of my funds to savings accounts

They are all in good accounts with good interest rates

Easy Access

Fixed ISA

Fixed Term

Premium Bonds

Inflation is eating away at my funds

But Im ok to accept this for now and will review it from time to time

Nebulous2

That may well be best for you, regardless of the inflation risk. If you have some longer fixed- terms,  then if inflation drops the gap between what you are getting and inflation may reduce.

jimjames

DoneWorking said:

Then interest rates crept up

Inflation is eating away at my funds

But Im ok to accept this for now and will review it from time to time

You're worse off now than you were a year ago. Inflation is the hidden attack on your savings.

Interest rate of 1% and inflation of 3% means you're losing 2% per year.
Interest rate of 5% and inflation of 10% means you're now losing 5% per year.

As has been said before you don't need to put all your money into one thing or another. I'm about 5% cash but others would have a higher amount.

DoneWorking

jimjames said:

DoneWorking said:

Then interest rates crept up

Inflation is eating away at my funds

But Im ok to accept this for now and will review it from time to time

You're worse off now than you were a year ago. Inflation is the hidden attack on your savings.

Interest rate of 1% and inflation of 3% means you're losing 2% per year.
Interest rate of 5% and inflation of 10% means you're now losing 5% per year.

As has been said before you don't need to put all your money into one thing or another. I'm about 5% cash but others would have a higher amount.

I've said I'm happy for now and will review regularly

A year ago inflation was nearer 5%

Obviously it's higher now

But most analysts expect it to fall at some point

I've obviously decided to accept the loss due to inflation for now instead of potential loss from investments during these very difficult times
As mentioned after fees and costs investment returns were not very high at my risk level

InvesterJones

jimjames said:

DoneWorking said:

Then interest rates crept up

Inflation is eating away at my funds

But Im ok to accept this for now and will review it from time to time

You're worse off now than you were a year ago. Inflation is the hidden attack on your savings.

Interest rate of 1% and inflation of 3% means you're losing 2% per year.
Interest rate of 5% and inflation of 10% means you're now losing 5% per year.

As has been said before you don't need to put all your money into one thing or another. I'm about 5% cash but others would have a higher amount.

Hard to think of many other assets that would have fared better though. Stock falls of 20% (UK mid cap for e.g.) and inflation of 10% would mean you're losing 30% per year.