Skipton Fixed Rate Bond maturing

notanoob

18 month £85K Bond maturing in a fortnight, was getting 4.17% with monthly income.  Would like to stay with Skipton as they don't clash with anyone else I have money with, and I like their style!  Need to keep monthly income as it supplements my fairly modest pensions.

Options for renewal are 1, 2, 3 or 5 years at rates between 3.9 and 3.6 gross.  Part of me wants to fix long and forget about it, but after much Googling I still can't work out in which direction rates are likely to go over the next few years.

There's also a variable rate easy access account, currently showing 3.49% for monthly income, which I am quite tempted by as it's currently negligibly below the 5-year fixed option.  However I would kick myself if rates fall and I can't find anywhere to move it to at a comparable rate.

Any gut feelings? What would a financially wise person do at this point?  If I don't respond they will automatically move it to a 1-year Bond, with 21 days to do something different or take it out. Could the rates currently on offer be pulled if the BoE decides to drop the rate on Thursday, in which case I really need to decide before then?

(BTW I'm here on one of my three usernames, keep getting locked out of them in turn due to invalid passwords, allegedly. So I do know pretty well how this forum works!).

Notanoob/Bogof_Babe/Bogof-OAP

notanoob

Thank you.  I didn't know about that one. Hmm, will give it some thought.

Albermarle

, but after much Googling I still can't work out in which direction rates are likely to go over the next few years.

Nobody knows, because nobody can see into the future, so it is always a kind of gamble .

wmb194

notanoob said:

Options for renewal are 1, 2, 3 or 5 years at rates between 3.9 and 3.6 gross.  Part of me wants to fix long and forget about it, but after much Googling I still can't work out in which direction rates are likely to go over the next few years.

Really? Down. Some people think that last week's budget will spur inflation and so rates won't fall as quickly as previously expected. 

The rates Skipton's offering you are poor, I'd look elsewhere. The best one year appears to be 4.85% and the best five year 4.4% but two and three years are about 4.6% so this could be the sweet spot.

You could hedge your bets by building a ladder i.e. split your money between multiple savings bonds with different durations.

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

SkylineExplorer

It often seems like there is no choice between the one year bond and the variable rate, If rates lower though, the flexibility of an option to pay higher rates at anytime in a year provides more security, while a variable rate is a historically good way to get a good monthly return but only if rates remain high fortunes may sometimes be made by blending the two and using these skills to keep a balance of flexibility and income.

Good luck with it, it really is a tough call

DRS1

JamesRobinson48 said:

If you want to stay with Skipton, one option might be to withdraw all the money and then, later the same day, pay most of it back into Skipton's 1 Year Save More Member Bond Issue 1, which pays 4.60% fixed rate. This pays annual (not monthly) interest; however you could choose to hold back a fraction of the proceeds in an EA account in order to satisfy your requirement for cash to supplement your pension during the intervening period.

The problem with that one is that it is only for money coming in from outside Skipton

notanoob

Hi again. More trouble signing in. Thanks for all your helpful feedback.

Going off on a tangent, if I do leave Skipton (it’s not set in stone, I just thought it might be easier than starting again and finding out about shared banking licences etc.), has anyone got any views on the Beverley Building Society? I was in Beverley yesterday and noticed they have a 2-year fixed bond at 4.25%, which does allow monthly interest.

Went in to see if they had a leaflet and I was quite impressed by the set-up. I came away with the forms to open the above account, although obviously I can’t pay in until my Skipton matures on 18th, but before I take the plunge I wondered how this one-branch independent BS is generally viewed?