Best saving/investment account

Albermarle

A 2-3 year fixed rate savings bond - how does this differ to the FD regular saver? I understand the money would be locked for the 2-3 years which is fine - but is the FD regular saver at 7% going to get me more interest or is it likely that the rate will drop below the fixed rate bond within the 3 years?

As with anything in this sphere, if you are offered a guaranteed interest rate/return that is above normal, there is usually one of three reasons

1) It is an outright  scam

2) It is something predicting a good return, but pretending to  guarantee it by some clever wording ( so some careful reading of the wording/small print is often needed )

3) It is perfectly legit but there is some restriction on how much you can add, how long it lasts e.g. the First Direct regular saver 

Middle_of_the_Road

Albermarle said:

A 2-3 year fixed rate savings bond - how does this differ to the FD regular saver? I understand the money would be locked for the 2-3 years which is fine - but is the FD regular saver at 7% going to get me more interest or is it likely that the rate will drop below the fixed rate bond within the 3 years?

As with anything in this sphere, if you are offered a guaranteed interest rate/return that is above normal, there is usually one of three reasons

1) It is an outright  scam

2) It is something predicting a good return, but pretending to  guarantee it by some clever wording ( so some careful reading of the wording/small print is often needed )

3) It is perfectly legit but there is some restriction on how much you can add, how long it lasts e.g. the First Direct regular saver 

The FD regular saver is a fixed rate of 7% for one year. 

Deposit £300 pm (300*12) = £3600 

£3,600 in a 1 year bond at 4% pays £144 interest

12 times £300 monthly deposits into a regular saver at 7% only pays £135 interest

Regular savings accounts 2023: Earn up to 7% (moneysavingexpert.com)

Eco_Miser

Middle_of_the_Road said:

Albermarle said:

A 2-3 year fixed rate savings bond - how does this differ to the FD regular saver? I understand the money would be locked for the 2-3 years which is fine - but is the FD regular saver at 7% going to get me more interest or is it likely that the rate will drop below the fixed rate bond within the 3 years?

As with anything in this sphere, if you are offered a guaranteed interest rate/return that is above normal, there is usually one of three reasons

1) It is an outright  scam

2) It is something predicting a good return, but pretending to  guarantee it by some clever wording ( so some careful reading of the wording/small print is often needed )

3) It is perfectly legit but there is some restriction on how much you can add, how long it lasts e.g. the First Direct regular saver 

The FD regular saver is a fixed rate of 7% for one year. 

Deposit £300 pm (300*12) = £3600 

£3,600 in a 1 year bond at 4% pays £144 interest

12 times £300 monthly deposits into a regular saver at 7% only pays £135 interest

Regular savings accounts 2023: Earn up to 7% (moneysavingexpert.com)

Of course, if you've actually got the £3,600 to start with, you may put it in the 4% bond and earn £144, or you might put it in a 3% Easy Access account from which you withdraw 12 times £300 monthly (the first immediately), earning you £49 interest, plus the £135 interest from the 7% regular saver, totaling £184.

Band7

jimjames said:

paulbarette said:

I have just downloaded the plum app to automatically put some money away but thinking I should be transferring some of this into one of the above or similar - does anyone have any suggestions or advice, or other accounts that would be more beneficial?

I wouldn't bother with things like Plum, just use the highest paying ISAs and savings accounts that you can find and switch them if the rates drop. Plum seems a bit of a gimmick when you can use proper savings and regular savers instead. Setup a standing order on payday to move money into a savings account that's automatically put money away without the need for something like plum.

Totally agree, with one  proviso......they can come in useful if you need Direct Debits for current account switch purposes, as they pull money from current accounts by DD (so am told, haven't done this myself). So a really small DD might be helpful, but I would never use Plum or other auto-savers for any serious savings purpose.

Aside from all this, the Plum interest rate is pretty terrible, too, even - and especially - if you pay them for better interest......

Band7

paulbarette said:

Another option for making some extra money is current account switching (using donor/burner accounts, not your main accounts). Between you and your partner, you could potentially make £2k over the next 12 - 18 months - easily beating interest you can earn, though requires a bit of work and being organised. Also requires decent credit files but I assume you have these. Hop over to the Banking board for more info.

This is very interesting! Would this not have an effect on mortgage applications? I'll check over on the banking boards but if you could link me any particular threads that you would recommend it would be greatly appreciated!

Most current account applications involve a hard search, which is recorded on your credit files. These hard searches disappear from your credit files after 12 months. So if you want to get a mortgage in 3 years time, you now have a clear 12-18 months at least to go after as many switch bonuses as you can fit in. Goes without saying that you must not go overdrawn on all those current accounts as defaults would stay on your credit files for 6 years. But there's no reason why you should go overdrawn, or why you should apply for overdrafts on those accounts.

adindas

Middle_of_the_Road said:

Band7 said:
 And really do consider liquidising your shares whilst you are ahead

Good advice, if not all of them, maybe enough to cover your initial investment.

I will be extremely careful to make decision to sell an asset especially at a huge loss solely based on random people on the internet who do not have a track record of making money in the stock market telling you to sell your assets. This might be against the general wisdom in investment. What you are doing here is actually buy high sell low. Let alone to be used to buy another assets you have not researched thoroughly that make you convince that you could at least recover your loss selling your old assets with your new investment. It is very easy to tell other people to sell their assets at a loss if you are not using your own money.

To sell assets for a loss people will need to do their own meticulous research and that decision need to be based on a solid informed decision. For people who do not have time or do not want to DYOR might be better to listen the balance views from both side of the arguments of proven investors or the views from investment strategists and take it from there.

For the OP it is a general consensus for the time span of three or so years is not considered a good idea to put it into investment. Let alone there are currently reasonable number of savings paying reasonably good interest rate although it is still much lower then the current inflation rate.

These are links to various high interest saving option

https://moneyfacts.co.uk/savings-accounts/

https://forums.moneysavingexpert.com/discussion/6392978/top-easy-access-acs-ranked-top-of-the-pots-no-chat/p1

https://forums.moneysavingexpert.com/discussion/6106986/regular-savings-accounts-the-best-currently-available-list/p1

Band7

adindas said:

Middle_of_the_Road said:

Band7 said:
 And really do consider liquidising your shares whilst you are ahead

Good advice, if not all of them, maybe enough to cover your initial investment.

I will be extremely careful to make decision to sell an asset especially at a huge loss solely based on random people on the internet who do not have a track record of making money in the stock market telling you to sell your assets.  

Nobody suggested that anything should be sold at a huge loss. If you read back, I suggested "consider liquidising your shares whilst you are ahead".

I also find your implied suggestion that I and others do not have a track record of making money in the stock market rather odd.

Albermarle

I will be extremely careful to make decision to sell an asset especially at a huge loss solely based on random people on the internet who do not have a track record of making money in the stock market telling you to sell your assets. 

You have got the wrong end of the stick.

These are the shares being referred to in the OP.

Currently I own shares in very good Diabetes pharma companies which have made a profit of 250% in the few years that I have had them and are valued at £7600. 

adindas

Albermarle said:

I will be extremely careful to make decision to sell an asset especially at a huge loss solely based on random people on the internet who do not have a track record of making money in the stock market telling you to sell your assets. 

You have got the wrong end of the stick.

These are the shares being referred to in the OP.

Currently I own shares in very good Diabetes pharma companies which have made a profit of 250% in the few years that I have had them and are valued at £7600. 

I am talking about "asset", e.g  Cryptos which obviously currently most likely to  make a huge loss. Even for the stock which have made a run of 250%, there is no need to sell if you have done DYOR and you believe they still have a very good chance to run any further based on their valuation. Amazon is just one of a few examples

https://www.thehealthyjournal.com/faq/what-would-10000-invested-in-amazon-be-worth-today#:~:text=An investment of $10,000 at,index over the same period.

People who bough BTC early 2020 might have seen their asset has quadrupled but they do not even consider selling a single one if they believe they will still have much chance to go much further. Similarly with people who bought TSLA early 2020 which have seen their stock 8X to this date.