Vanguard SIPP cash interest

Sunnylifeover50plan

NedS said:

Albermarle said:

DavidT67 said:

Vanguard S&S ISA is Flexible, so that's an easy access, tax free deposit at 2.2%

According to MSE, the best Flexible, easy access, Cash ISA is Paragon bank at 3.2%

So logically, if you were in Vanguard for the cash interest rate, a transfer elsewhere is now advisable.

Yes, but the OP has a SIPP so does not have that flexibility.

and the Money Market fund I linked in the first reply, which is available in the Vanguard SIPP, beats all of those as it tracks the SONIA overnight rate.

I'm tempted to put some cash from my SIPP into the money market fund as opposed to just holding cash. What are the actual monthly returns looking like at the moment?

dunstonh

Sunnylifeover50plan said:

NedS said:

Albermarle said:

DavidT67 said:

Vanguard S&S ISA is Flexible, so that's an easy access, tax free deposit at 2.2%

According to MSE, the best Flexible, easy access, Cash ISA is Paragon bank at 3.2%

So logically, if you were in Vanguard for the cash interest rate, a transfer elsewhere is now advisable.

Yes, but the OP has a SIPP so does not have that flexibility.

and the Money Market fund I linked in the first reply, which is available in the Vanguard SIPP, beats all of those as it tracks the SONIA overnight rate.

I'm tempted to put some cash from my SIPP into the money market fund as opposed to just holding cash. What are the actual monthly returns looking like at the moment?

https://www.bankofengland.co.uk/markets/sonia-benchmark

Sunnylifeover50plan

dunstonh said:

Sunnylifeover50plan said:

NedS said:

Albermarle said:

DavidT67 said:

Vanguard S&S ISA is Flexible, so that's an easy access, tax free deposit at 2.2%

According to MSE, the best Flexible, easy access, Cash ISA is Paragon bank at 3.2%

So logically, if you were in Vanguard for the cash interest rate, a transfer elsewhere is now advisable.

Yes, but the OP has a SIPP so does not have that flexibility.

and the Money Market fund I linked in the first reply, which is available in the Vanguard SIPP, beats all of those as it tracks the SONIA overnight rate.

I'm tempted to put some cash from my SIPP into the money market fund as opposed to just holding cash. What are the actual monthly returns looking like at the moment?

https://www.bankofengland.co.uk/markets/sonia-benchmark

Thankyou. Am I reading right, in the sense that it's paying 4% roughly per annum?

NedS

Sunnylifeover50plan said:

dunstonh said:

Sunnylifeover50plan said:

NedS said:

Albermarle said:

DavidT67 said:

Vanguard S&S ISA is Flexible, so that's an easy access, tax free deposit at 2.2%

According to MSE, the best Flexible, easy access, Cash ISA is Paragon bank at 3.2%

So logically, if you were in Vanguard for the cash interest rate, a transfer elsewhere is now advisable.

Yes, but the OP has a SIPP so does not have that flexibility.

and the Money Market fund I linked in the first reply, which is available in the Vanguard SIPP, beats all of those as it tracks the SONIA overnight rate.

I'm tempted to put some cash from my SIPP into the money market fund as opposed to just holding cash. What are the actual monthly returns looking like at the moment?

https://www.bankofengland.co.uk/markets/sonia-benchmark

Thankyou. Am I reading right, in the sense that it's paying 4% roughly per annum?

Yes. SONIA is currently around 4.177% so any money market fund tracking SONIA rates should currently be yielding around 4% after fees.

Mutton_Geoff

https://www.youtube.com/watch?v=AYmcGJOa3eY

L9XSS

After playing about with my SIPP investments, I’ve moved about 10% pension cash into Sterling Money Market funds. I’m looking at this as a temporary hold. (Possibly 6months).My mixed portfolio is now on a 6 year trajectory before starting drawdown so I’m looking to maximise returns across a widespread mix. The potential for the BOE to raise rates again next month, makes me think I should liquidate another 5% into cash to take advantage of + 4% returns. Current portfolio has been tracking at +2.8% since january. (Mix of ETFs. UK & USA and cash on interest in SIPP). Anyone in the last few years before drawdown contemplating the same. I do not need my DC pot to last 40+ years as have a decent mix of DB pension payable at 60......

NedS

L9XSS said:

After playing about with my SIPP investments, I’ve moved about 10% pension cash into Sterling Money Market funds. I’m looking at this as a temporary hold. (Possibly 6months).My mixed portfolio is now on a 6 year trajectory before starting drawdown so I’m looking to maximise returns across a widespread mix. The potential for the BOE to raise rates again next month, makes me think I should liquidate another 5% into cash to take advantage of + 4% returns. Current portfolio has been tracking at +2.8% since january. (Mix of ETFs. UK & USA and cash on interest in SIPP). Anyone in the last few years before drawdown contemplating the same. I do not need my DC pot to last 40+ years as have a decent mix of DB pension payable at 60......

Depending what other cash you may have, it certainly makes sense to have enough in cash (or near cash) as you approach retirement. I wouldn't think of it as the percentage of your portfolio, but rather how much cash will you need to draw over the next 3 years (for example, if that is what you are comfortable having in cash) and keep that in cash.

In the recent past (last 15 years) holding lots of cash has been a drag, but at least now you can get some sort of guaranteed return, even if that is still not matching current inflation. It will also act as a bit of ballast against portfolio volatility.

I have an income portfolio that will produce the income I need, so I tend to keep less in cash (maybe 1 years worth) and allow the dividends to replenish that buffer. If I were pursuing a total return drawdown strategy I think I'd want to hold more cash but it's whatever you are comfortable with. Most seem to recommend 3 years in cash to avoid selling assets at the bottom of a crash.

Bravepants

I just dumped 4 years' worth of SIPP drawdown (~£50k) into CSH2 - LYXOR Smart Cash, by buying the ETF on HL.

Johnny_Doe

NedS said:

Why not put the cash into Vanguard's Short Term Money Market fund which tracks the overnight SONIA rate?

https://www.vanguardinvestor.co.uk/investments/vanguard-sterling-short-term-money-market-fund-investor-gbp-income-shares/overview

Forgot to say thanks for this , very much appreciated - I've now invested in this so very useful for those who can't face investing a lump sum into stocks and shares all at once. 

NedS

Johnny_Doe said:

NedS said:

Why not put the cash into Vanguard's Short Term Money Market fund which tracks the overnight SONIA rate?

https://www.vanguardinvestor.co.uk/investments/vanguard-sterling-short-term-money-market-fund-investor-gbp-income-shares/overview

Forgot to say thanks for this , very much appreciated - I've now invested in this so very useful for those who can't face investing a lump sum into stocks and shares all at once. 

You're welcome. Don't forget holding cash is not a sensible option for the long term as it will almost always under-perform against inflation and lose value in real terms. But as you suggest, getting a return on cash whilst drip feeding a large lump sum into long-term investments is not necessarily a bad thing.