Nationwide 5% 15 month Members Bond

Yorkie1

Brilliant, thanks both. My maths was way off!

The NW offer does look quite good then, considering there's not much around the % you've both mentioned.

AndyTh_2

TN28 gilt (being 20 months till maturity) may be better for tax payers (those who use up their Personal Savings Allowance) if held to maturity
or even TG27 at 14 months till maturity (marginally for basic rate tax payers)

zagfles

https://forums.moneysavingexpert.com/discussion/comment/82008950#Comment_82008950

Yes this new NW bond isn't good value if you pay tax on interest. Definitely not if you pay higher rate tax. I'm trying to work out exactly how much I can put in to use up my PSA, but I'll have to guess what interest rates I'll get on the regular savers if I renew them…

fourmarks

Pardon my ignorance but would the 22% tax rate apply over the entire15 month period or, would it stay at 20% for the period up to 4/27 and then up to 22% for whatever period falls in the folowing tax year?

EthicsGradient

https://forums.moneysavingexpert.com/discussion/comment/82009928#Comment_82009928

It'll be 22% for the whole 15 months, since the first interest payment is not until 12 months from when you open it.

Yorkie1

It's the date it's credited which matters, not the period it relates to. Interest is added to the account at anniversary and maturity, both of which will be in the same tax year (27-28), hence 22% (assuming the interest is beyond your savings rate 0% amount and you are a basic rate taxpayer)

Rollinghome

With forecasts of inflation at 6% and higher rates by the end of the year, it doesn’t look a great time to go into a 15-month fix. I’d hate to pay tax as if I’d received 5% interest when in real terms I’d received minus 1%, and to receive it just in time to pay the increased tax rate.

Looks as if the banks are anxious to get our money in before they have to pay more for it. As well as Nationwide, MBNA (part of Lloyds group) are now offering 4.85% for 1yr fix on up to £750,000, with others close behind.

fourmarks

Thank you both for your answers. Not what I wanted to hear, but definitely the one I expected.

mebu60

Applied today so that it will mature on a Tuesday. My account is open but it will take 5-7 days they say to send me info on internet access (as a VM customer). I only have 14 days to pay in!

Hoping that in reality I will have all the relevant info early / middle of next week.

soulsaver

@mebu60 You can see the sort code and ac number details immediately in the app - and working COP.