Advice to park £16000 short term

ChewyyBacca

I have NS&I 6.2% bonds maturing £10K next week
Also withdrawing from Principality Home Saver which is reducing to 5% next week.

I have a short term horizon- 4 to 9 months, not sure when the money will be needed, so cannot fix it. My plan is
1. £10 K in windfall bond at 5% plus some prize draw
2. £6 K in Investec 90 days Notice account at 5.25%. If rates go down, I assume investec will give a notice of atleast 90 days.

Any downsides or specific T&C to be aware of in these 2 products? Also torn if should I put entire amount in Investec at 5.25%

Do you guys see any other better options at the moment? 

ColdIron

ChewyyBacca said:

2. £6 K in Investec 90 days Notice account at 5.25%. If rates go down, I assume investec will give a notice of atleast 90 days.

104 days as it happens, seems a good fit for what you want

• We’ll tell you at least 104 days before we start paying the new rate

https://investecuk-ofs-documents.s3.eu-west-2.amazonaws.com/ns-product-terms-JUN24.pdf

ChewyyBacca

ColdIron said:

ChewyyBacca said:

2. £6 K in Investec 90 days Notice account at 5.25%. If rates go down, I assume investec will give a notice of atleast 90 days.

104 days as it happens, seems a good fit for what you want

• We’ll tell you at least 104 days before we start paying the new rate

https://investecuk-ofs-documents.s3.eu-west-2.amazonaws.com/ns-product-terms-JUN24.pdf

104 days is decent notice to the investors.
Any idea of windfall bonds? is the prize draw transparent?

friolento

ChewyyBacca said:

ColdIron said:

ChewyyBacca said:

2. £6 K in Investec 90 days Notice account at 5.25%. If rates go down, I assume investec will give a notice of atleast 90 days.

104 days as it happens, seems a good fit for what you want

• We’ll tell you at least 104 days before we start paying the new rate

https://investecuk-ofs-documents.s3.eu-west-2.amazonaws.com/ns-product-terms-JUN24.pdf

104 days is decent notice to the investors.
Any idea of windfall bonds? is the prize draw transparent?

I am sure I read a post on here some time ago, explaining that the odds of the Windfall bonds are even worse than the Premium Bond odds

WillPS

I'm not sure I see the logic of drawing down your Principality Home Saver at 5% to save it at 5% elsewhere? Might as well leave that where it is until you've a better rate for the cash.

I would be taking a look at the capped easy access accounts on the market - Cahoot Sunny Day (5.2% up to £3k until December, then 5%) and Santander Edge (6% up to £4k). You could even play the regular saver game, just make sure you're sticking to accounts which allow withdrawals or early closure.

janusdesign

WillPS said:

I'm not sure I see the logic of drawing down your Principality Home Saver at 5% to save it at 5% elsewhere? Might as well leave that where it is until you've a better rate for the cash.

I would be taking a look at the capped easy access accounts on the market - Cahoot Sunny Day (5.2% up to £3k until December, then 5%) and Santander Edge (6% up to £4k). You could even play the regular saver game, just make sure you're sticking to accounts which allow withdrawals or early closure.

I had the same thought on both moving the cash from PBS and the two EA options you mention... probably worth mentioning that rate drops with those two accounts will be given with 2 months notice, so they are not imminently due to drop any time soon.

I suppose if the OP were concerned that PBS rate might drop further, then it makes some sense to fix if they can - plenty of 3 & 6 month fixes at 5% are available (highest is 5.21%).

though I think the difference between fixing at 5% compared to 5.25% over 6 months is probably less than £20, so I personally wouldn't overly worry about the decision.

ChewyyBacca

WillPS said:

I'm not sure I see the logic of drawing down your Principality Home Saver at 5% to save it at 5% elsewhere? Might as well leave that where it is until you've a better rate for the cash.

I would be taking a look at the capped easy access accounts on the market - Cahoot Sunny Day (5.2% up to £3k until December, then 5%) and Santander Edge (6% up to £4k). You could even play the regular saver game, just make sure you're sticking to accounts which allow withdrawals or early closure.

WillPS Well, both the options are 5%, yes, but one enters into a prize draw.

I have Santander Edge at 7% atm, will refresh it to 6% in Nov.

Does Cahoot need a CA? I will check, if its 5.2% until Dec then absolutely a great choice
Edit: Cahoot is now 5% :-:neutral:

Reg savers- except Vernon and Nationwide & a couple others where CA is requiremnent or the ones that dont allow withdrawals at all until maturity, I have other Reg savers. But currently I need to park these funds somewhere and get decent returns. The new ones are mini reg savers, only allowing pay in of 50-100 per month

ChewyyBacca

friolento said:

ChewyyBacca said:

ColdIron said:

ChewyyBacca said:

2. £6 K in Investec 90 days Notice account at 5.25%. If rates go down, I assume investec will give a notice of atleast 90 days.

104 days as it happens, seems a good fit for what you want

• We’ll tell you at least 104 days before we start paying the new rate

https://investecuk-ofs-documents.s3.eu-west-2.amazonaws.com/ns-product-terms-JUN24.pdf

104 days is decent notice to the investors.
Any idea of windfall bonds? is the prize draw transparent?

I am sure I read a post on here some time ago, explaining that the odds of the Windfall bonds are even worse than the Premium Bond odds

Thanks for the feedback. I couldnt find much about that. There is no transparency like Premium bonds.

However one imp difference Premium bonds dont give any interest. So Full Holding can potentially give £0 in a month.
So small odds of Windfall still better with 5% interest.

OldScientist

ChewyyBacca said:

friolento said:

ChewyyBacca said:

ColdIron said:

ChewyyBacca said:

2. £6 K in Investec 90 days Notice account at 5.25%. If rates go down, I assume investec will give a notice of atleast 90 days.

104 days as it happens, seems a good fit for what you want

• We’ll tell you at least 104 days before we start paying the new rate

https://investecuk-ofs-documents.s3.eu-west-2.amazonaws.com/ns-product-terms-JUN24.pdf

104 days is decent notice to the investors.
Any idea of windfall bonds? is the prize draw transparent?

I am sure I read a post on here some time ago, explaining that the odds of the Windfall bonds are even worse than the Premium Bond odds

Thanks for the feedback. I couldnt find much about that. There is no transparency like Premium bonds.

However one imp difference Premium bonds dont give any interest. So Full Holding can potentially give £0 in a month.
So small odds of Windfall still better with 5% interest.

The method used in the windfall draw is described in the product features booklet linked at https://www.familybuildingsociety.co.uk/savings/notice-accounts/product-detail/windfallbond (page 11 onwards of the booklet).

The advantage of the account is that you get the BoE base rate in interest plus a small chance of winning some additional money (although, as far as I can tell, it is not possible to calculate the odds based on the information given in the booklet and I think the odds will change from month to month).

The downside is that the interest rate will be changed on the 1st day of the month following a change in the BoE base rate, so will track any future changes quite quickly.

It also takes two months before the bond is entered for the draw.

IanManc

OldScientist said:

ChewyyBacca said:

friolento said:

ChewyyBacca said:

ColdIron said:

ChewyyBacca said:

2. £6 K in Investec 90 days Notice account at 5.25%. If rates go down, I assume investec will give a notice of atleast 90 days.

104 days as it happens, seems a good fit for what you want

• We’ll tell you at least 104 days before we start paying the new rate

https://investecuk-ofs-documents.s3.eu-west-2.amazonaws.com/ns-product-terms-JUN24.pdf

104 days is decent notice to the investors.
Any idea of windfall bonds? is the prize draw transparent?

I am sure I read a post on here some time ago, explaining that the odds of the Windfall bonds are even worse than the Premium Bond odds

Thanks for the feedback. I couldnt find much about that. There is no transparency like Premium bonds.

However one imp difference Premium bonds dont give any interest. So Full Holding can potentially give £0 in a month.
So small odds of Windfall still better with 5% interest.

The method used in the windfall draw is described in the product features booklet linked at https://www.familybuildingsociety.co.uk/savings/notice-accounts/product-detail/windfallbond (page 11 onwards of the booklet).

The advantage of the account is that you get the BoE base rate in interest plus a small chance of winning some additional money (although, as far as I can tell, it is not possible to calculate the odds based on the information given in the booklet and I think the odds will change from month to month).

The downside is that the interest rate will be changed on the 1st day of the month following a change in the BoE base rate, so will track any future changes quite quickly.

It also takes two months before the bond is entered for the draw.

The T&Cs state that they can review their "linkage" to the base rate and the rate paid can either be above or below base rate, subject to 14 + 35 days notice. At least you can get your money out within a few weeks if the interest rate drops to a level that you don't like though.