Co op 6% Fixed

PippyPumpkin

Now I'm not so sure, if it's a safe bet, thanks for everyone comments.

ColdIron

PippyPumpkin said:

Now I'm not so sure, if it's a safe bet, thanks for everyone comments.

Let me put your mind at rest. It isn't as safe as something covered by the FSCS

wmb194

PippyPumpkin said:

Yes fonesaver, that was my only worry, but the Co op should be okay, for the next few years......right?

In the past I've looked at these and passed on them because these Co-ops' financials looked weak i.e. they don't make much money and it still looks to be the case so I wouldn't touch it. 

Starting with regular savers, there are other, safer ways to earn c.6%.



https://www.midcounties.coop/legal/corporate-info/corporate-reports/

PippyPumpkin

Wow thanks wmb194, that's quick data, I not great at understanding, profit & lost stuff like that, so maybe best to stick "standard" ways of earning a few bob   

HappyHarry

wmb194 said:

PippyPumpkin said:

Yes fonesaver, that was my only worry, but the Co op should be okay, for the next few years......right?

In the past I've looked at these and passed on them because these Co-ops' financials looked weak i.e. they don't make much money and it still looks to be the case so I wouldn't touch it. 

Starting with regular savers, there are other, safer ways to earn c.6%.



https://www.midcounties.coop/legal/corporate-info/corporate-reports/

Thank you @wmb194 - hopefully many interested people will see this.

In a nutshell, it is an offer to loan a loss-making business (£4.4m loss last year, £6.7m loss the year before) a sum of money, with no FSCS protection, for a rate marginally higher than could be obtained in a safe savings account.

It does not look like a good opportunity for people interested in safe savings accounts.

Albermarle

Maybe best not to mention the fiasco with the Coop bank......

DirtyConcrete

Swipe said:

No way I'd consider it. Especially considering they got hacked earlier this year and didn't even have the decency to email their members and apologise for leaking their personal details.

Except they didn't - that was the Co-operative Group

https://www.midcounties.coop/landing-pages/a-message-from-our-ceo/

Essex123

Tread very carefully here - I suggest people look up Chelmsford Star Co-op to get an idea of the risks.

They went from being confident they could turn the society around at their May AGM (see YouTube if you’re bored) to proposing a transfer of engagements within two months.

it was widely reported locally and nationally that if members did not vote through the transfer the society would likely shut down.

https://www.essexlive.news/news/essex-news/more-30-essex-co-op-10296016.amp

They offered decent rates for investments up to £50k but there have been limits on withdrawals for a while, and currently a complete suspension:

https://www.chelmsfordstar.coop/get-involved/invest-in-share-capital/#:~:text=Our%20members%20have%20the%20option,payments%20of%20up%20to%205.25%25.

Fortunately my exposure was just £1!

Essex123

EthicsGradient said:

Since it's not covered by the FSCS guarantee, these are really corporate bonds, and should be compared with similar bonds, rather than savings accounts. This seems to be Midcounties Co-Op, so you should be comparing the risk of that entity being unable to meet its commitments with similar corporate bonds.

In terms of risk, these ‘bonds’ are actually classified as equity/share capital.  From the Mid Counties T&C:

9. Fixed Term Investments form part of the share capital of the Society.

And

14. The position the holder of a Fixed Term Investment occupies as a shareholder in the Society is no different from that of a shareholder in any other corporate body in so far as, if the Society fails, the holder may not have all or any of their investment returned to them. Co-operative societies, unlike banks and building societies, are not subject to prudential supervision by the Financial Services Authority.

ColdIron

Essex123 said:

Co-operative societies, unlike banks and building societies, are not subject to prudential supervision by the Financial Services Authority.

I don't think anyone is. The FSA (Financial Services Authority) was replaced in 2013 by the FCA and the Prudential Regulation Authority (PRA)