What would you do - fixed rate account - 6 or 9 months?

howryoo

If you had 30 - 40k which you can put into a fixed account for the short term, would you go for 6 months at 4.15% or 9 months at 4.25% / 4.30%

eskbanker

I'd choose based on when I was going to need access to the money....

TheMilkmansDad

What I would do in my particular circumstance is potentially entirely different from what you would do in yours.

But to answer the question; 9 months @4.3% for now.

george4064

9 months option pour moi!

(What I'd go for isn't necessary what you should opt for)

EthicsGradient

Since you're not contemplating a 1 year fix, you presumably need most of the money in less than a year. If you know you don't need it for at least 9 months, then the 9 month fix looks better for you (it's a higher rate, so you'd need a higher rate still for the last 3 months or so - from a notice account, or instant access, in 6 month's time to make up for that. That's very unlikely, even with any base interest rise from the BoE soon).

Middle_of_the_Road

howryoo said:

If you had 30 - 40k which you can put into a fixed account for the short term, would you go for 6 months at 4.15% or 9 months at 4.25% / 4.30%

I would do the 6 month at the rates you mention. Not enough difference between the two to choose the 9  month. If rates are higher in 6 months time, you have earlier options. If they're lower, the extra 3 months won't make much difference. 

This is just an observation of how I see it, not advice. Probably as helpful, or not, as the previous replies.

howryoo

Thanks for your replies everyone.

Was thinking of 6 months, as initially had same thoughts as @Middle_of_the_Road did - in that funds can be accessed earlier or reinvested with options at the time.

However, I then lent towards the 9 month option, as similar to @EthicsGradient 's thinking - in that you'd need a higher rate for the last 3 months.

Correct me if my rough workings are out, but if 40k:

The difference in interest for the first 6 months at 4.15% vs 4.30% is ~£30.

Then say if easy access rates or the prevailing 6 month rates are around 3.50%, then the difference in interest for the remaining 3 months' (if went for 9 months at 4.30%) will be ~£80

So based on above, I'd be be better off by £110 or so over 9 months?

It's always a gamble I know.

howryoo

Haven't used Shawbrook in a while, but does it still take over an hour for funds to appear in your account?  I assume it's pretty much instant with Atom?

Silly question, but whether it's Atom ot Shawbrook (or any other bank), when do you start earning interest?  The next full day I presume?

And if I went with Shawbrook today, does that mean the account matures on Thursday 25th Jan 2024?  With funds available the next day - Friday 26th?  With the weekend, would funds be in limbo, if funds are only available on Fri 26th, Shawbrook transfers it out, but not crediting until Monday 29th Jan 2024?

Would be good if anyone can share their recent experience in this regard - what's the timeline with matured fixed rate funds.

Middle_of_the_Road

howryoo said:

Thanks for your replies everyone.

Was thinking of 6 months, as initially had same thoughts as @Middle_of_the_Road did - in that funds can be accessed earlier or reinvested with options at the time.

However, I then lent towards the 9 month option, as similar to @EthicsGradient 's thinking - in that you'd need a higher rate for the last 3 months.

Correct me if my rough workings are out, but if 40k:

The difference in interest for the first 6 months at 4.15% vs 4.30% is ~£30.

Then say if easy access rates or the prevailing 6 month rates are around 3.50%, then the difference in interest for the remaining 3 months' (if went for 9 months at 4.30%) will be ~£80

So based on above, I'd be be better off by £110 or so over 9 months?

It's always a gamble I know.

That all sounds correct. You could make use of a 90 day notice account after 6 months though, to narrow the gap.

howryoo

Middle_of_the_Road said:

howryoo said:

Thanks for your replies everyone.

Was thinking of 6 months, as initially had same thoughts as @Middle_of_the_Road did - in that funds can be accessed earlier or reinvested with options at the time.

However, I then lent towards the 9 month option, as similar to @EthicsGradient 's thinking - in that you'd need a higher rate for the last 3 months.

Correct me if my rough workings are out, but if 40k:

The difference in interest for the first 6 months at 4.15% vs 4.30% is ~£30.

Then say if easy access rates or the prevailing 6 month rates are around 3.50%, then the difference in interest for the remaining 3 months' (if went for 9 months at 4.30%) will be ~£80

So based on above, I'd be be better off by £110 or so over 9 months?

It's always a gamble I know.

That all sounds correct. You could make use of a 90 day notice account after 6 months though, to narrow the gap.

Thanks.  If I went with the 6 month option, I'd most likely place it in an easy access account after maturity (or a 90/95 day notice account as you suggest).  I mentioned in my earlier comment that I'd maybe reinvest in another 6 months, but that will not be an option, otherwise I'd contemplate a 1 year account.

howryoo

dosh37 said:

Unfortunately Amazon don't sell crystal balls. If they did, we would all be rich.

No doubt you can buy them cheap from China.

Saving / Investing is a gamble like so many things in life.

Asking questions like that on an internet forum is pretty pointless.

It's a bit like asking ' what is the meaning of life'

You will get a whole raft of answers from idiots to so called experts.

None of which will match what actually happens in the future.

Appreciate your comments, but I'm sure there are loads of experts here who can add some value.  I'd prefer to respect their opinions rather than calling people 'idiots' or 'so called experts'. 

Someone may actually highlight something which hasn't crossed my mind, so can be helpful.