Should I wait till saving in bonds

WSB

Have a couple of bonds just matured and ready to open a couple more (isa and normal).
Have the 35K ready to invest now in some more 1 year bonds but thinking whether I should hang in till bank of england give their expected interest rate rise and bond rates increase in line.?
How long typically after bank of england announce new rate do banks etc take to update their savings accounts?
Thanks 

Browntoa

Kroo is offering 4.5% no lock in

While you bide your time

masonic

Why would bonds increase in line? If rates are already expected to increase, then wouldn't that be priced in?

InvesterJones

masonic said:

Why would bonds increase in line? If rates are already expected to increase, then wouldn't that be priced in?

With stocks/funds of bonds I'd expect that kind of behaviour, but bonds themselves.. I'd have thought they were more aligned with current lending rates - just maintain whatever risk margin you need over the base rate so if the base rate increases so would bond yields, and not a huge amount in anticipation.

masonic

InvesterJones said:

masonic said:

Why would bonds increase in line? If rates are already expected to increase, then wouldn't that be priced in?

With stocks/funds of bonds I'd expect that kind of behaviour, but bonds themselves.. I'd have thought they were more aligned with current lending rates - just maintain whatever risk margin you need over the base rate so if the base rate increases so would bond yields, and not a huge amount in anticipation.

We are referring to fixed term savings accounts (aka bonds). They are based on the bank's anticipated lending rate over the account term and the supply of people wanting loans and mortgages. There have been periods when fixed rates have fallen against a backdrop of rising base rates. The best 1 year fix of 6.2% may not be beaten in the weeks following the next MPC decision, let alone "in line". Especially considering it's NS&I, who for some unknown reason is outcompeting all the banks.

badger09

masonic said:

InvesterJones said:

masonic said:

Why would bonds increase in line? If rates are already expected to increase, then wouldn't that be priced in?

With stocks/funds of bonds I'd expect that kind of behaviour, but bonds themselves.. I'd have thought they were more aligned with current lending rates - just maintain whatever risk margin you need over the base rate so if the base rate increases so would bond yields, and not a huge amount in anticipation.

We are referring to fixed term savings accounts (aka bonds). They are based on the bank's anticipated lending rate over the account term and the supply of people wanting loans and mortgages. There have been periods when fixed rates have fallen against a backdrop of rising base rates. The best 1 year fix of 6.2% may not be beaten in the weeks following the next MPC decision, let alone "in line". Especially considering it's NS&I, who for some unknown reason is outcompeting all the banks.

Random thought & probably way off beam, but could it be Gov’s not so subtle way of ‘encouraging’ banks to increase their interest rates and also removing disposable income from the economy?

masonic

badger09 said:

masonic said:

InvesterJones said:

masonic said:

Why would bonds increase in line? If rates are already expected to increase, then wouldn't that be priced in?

With stocks/funds of bonds I'd expect that kind of behaviour, but bonds themselves.. I'd have thought they were more aligned with current lending rates - just maintain whatever risk margin you need over the base rate so if the base rate increases so would bond yields, and not a huge amount in anticipation.

We are referring to fixed term savings accounts (aka bonds). They are based on the bank's anticipated lending rate over the account term and the supply of people wanting loans and mortgages. There have been periods when fixed rates have fallen against a backdrop of rising base rates. The best 1 year fix of 6.2% may not be beaten in the weeks following the next MPC decision, let alone "in line". Especially considering it's NS&I, who for some unknown reason is outcompeting all the banks.

Random thought & probably way off beam, but could it be Gov’s not so subtle way of ‘encouraging’ banks to increase their interest rates and also removing disposable income from the economy?

Interesting idea, and that could have been used to good effect earlier in the year. If that was the objective, it hasn't had much effect so far, a week and a half since launch. I take a more cynical view that they have short term funding targets and therefore are willing to borrow at a higher rate than they could get from other means (e.g. gilt issuance). All guesswork of course.

Qyburn

Browntoa said:

Kroo is offering 4.5% no lock in

While you bide your time

Max easy access is over 5%. 

Thumbs_Up

Some predicted the end of savings bond rates going up anymore and suggested get your money in quick, then NS&I saves the day for me (and my interest earning potential over 85k)   

Plenty of people on here play the game called guess-o-nomics me included although I like to add with some modesty that I was correct with the last few interest rate rises that were implemented.

Will the bank base rate go up again? I won’t give it any thought until mid next year so I  don’t really know and I won’t care because 90% of my money is now in fixed rates.

Bigwheels1111

Like last November, BOE rates rise but savings rates went down.

If I had not fixed last year I would be fixing now.

Know what you are getting, or gamble and wait.

SVaz

Mortgage rates are coming down so I can’t see savings interest getting any higher.
A year or so back,  people would have been beside themselves with joy to have 5%.