5% accounts - which would you go for?

TomDolan

Collyflower1 said:

Rheumatoid said:

I like the look of the Gatehouse offering but looks like you need to fund within 10 days of opening. Presume from the above that this can be in multiple deposits? Is  £1 test payment possible?
Thanks 

If youre a new customer youre allowed 30 days to put in your deposit! However, once youve put in your initial deposit you only have another 5 days in which to put in your full intended amount!

I rang Gatehouse today, they confirmed you have 30day window to make deposits starting from application date

Rheumatoid

Damn, should have gone for it. Rate now reduced

Oasis1

Rheumatoid said:

Damn, should have gone for it. Rate now reduced

Good spot and sorry to hear that. I've e-mailed to check which rate I'll be getting in hope I made it in time...

Rheumatoid

Looks like maybe Close brothers 5.05 now probably best bet

pedrodelgado

Rheumatoid said:

Looks like maybe Close brothers 5.05 now probably best bet

Along with United Trust Bank at 5.05% and if you want all interest paid on maturity after 5 yrs ,it'll compound each yrs interest ,thus giving you an equivalent yr rate of 5.58% but watch out for your tax status getting it all in the one year. 
Just opened an account ,really easy to do and fund, any questions are very quickly answered. Would not hesitate to recommend. Have 14 days to fund from application acceptance so if you want to stop the clock on the 5.05% rate 5yr account best act quick is my advice.

Rheumatoid

pedrodelgado said:

Rheumatoid said:

Looks like maybe Close brothers 5.05 now probably best bet

Along with United Trust Bank at 5.05% and if you want all interest paid on maturity after 5 yrs ,it'll compound each yrs interest ,thus giving you an equivalent yr rate of 5.58% but watch out for your tax status getting it all in the one year. 
Just opened an account ,really easy to do and fund, any questions are very quickly answered. Would not hesitate to recommend. Have 14 days to fund from application acceptance so if you want to stop the clock on the 5.05% rate 5yr account best act quick is my advice.

Good point about tax. Didn't see option to opt for annual or at maturity when I applied though.

Did you open Close or UTB?

happybagger

Interest paid to the bond on the anniversary date is part of that tax year's income. The interest becomes withdrawable when the bond matures but all the rolled-up interest is not considered earned in that one final tax year.

refluxer

happybagger said:

Interest paid to the bond on the anniversary date is part of that tax year's income. The interest becomes withdrawable when the bond matures but all the rolled-up interest is not considered earned in that one final tax year.

That definitely makes sense, but do we know for definite that all banks report annual interest to HMRC (on fixed rate savers of 2 years or more) when it is paid into the account each year, though ? If this was a concern, I thought the general advice was to contact the bank to check whether they do actually report it annually or only on maturity. 

bd10

I chose Barclays' Rainy Days instant savers account. Offers 5.12% with no notice, good until tax year end, picking up the interest and straight into my SIPP to get the top up there. Not interested in locking in rates at the moment.

Albermarle

refluxer said:

happybagger said:

Interest paid to the bond on the anniversary date is part of that tax year's income. The interest becomes withdrawable when the bond matures but all the rolled-up interest is not considered earned in that one final tax year.

That definitely makes sense, but do we know for definite that all banks report annual interest to HMRC (on fixed rate savers of 2 years or more) when it is paid into the account each year, though ? If this was a concern, I thought the general advice was to contact the bank to check whether they do actually report it annually or only on maturity. 

On this thread Interest - paid monthly or annually? — MoneySavingExpert Forum
You ( and others ) state that having interest paid monthly into the account for any  fixed rate/term account, means that the interest is spread out from a tax point of view.
So logically having the interest paid annually for a two year fix, must do the same ?

If it depends on the provider then presumably that would be the same in both cases ?