Looking for best 1 year fixed rate bond/ gilt

wmb194

https://forums.moneysavingexpert.com/discussion/comment/82095470#Comment_82095470

Would this be in an ISA, Sipp or a GIA? Treasury bills are different to gilts in that they are classed as deeply discounted securities so capital gains on them are classed as interest - they are issued at a discount and redeemed at par. Freetrade offers one month Treasury bills with the auction every Friday on normal weeks.

They also have to be held to maturity - there's no secondary market - so they lose the flexibility of gilts.

If in a GIA you'd probably earn more interest in a normal savings account.

ColdIron

How does this work? There are no details

Plenty of details here, surprised there isn't a link in the email

https://www.hl.co.uk/shares/ipos-and-new-issues

is it worth putting say £20k each or only one but which one?

Only you can answer that question, some will want 3 months, others 6 months

itsme999

I read recent TBs yield ranges from 3.8% to 4% for 1 to 6 months, there is no coupons and the income is taxable, seems not worth it but must be in demand and for who?

It seems its good for ISAs and SIPPs. I have already used ISA allowance for this tax year and know very little about SIPPs.

ColdIron

https://forums.moneysavingexpert.com/discussion/comment/82095515#Comment_82095515

I maintain a ladder of the 6 month ones maturing every month in my SIPP, the rates are better than HL's interest rates on cash (2.20%-2.30%) which I can't put it in a savings account. No tax, free to buy, free to redeem and with capped rates free to hold

I wouldn't use them in a GIA and have no need in my ISA

Suits me well but possibly not for you if your circumstances and goals differ from mine

masonic

https://forums.moneysavingexpert.com/discussion/comment/82095515#Comment_82095515

It's not a bad rate for short-term institutional money. But consumers have access to savings products that are better.

poseidon1

For the more sophiscated but risk aversed ISA investors under age of 65, I can see these Treasury Bills as a potential means to get around the prohibition against cash or near cash assets to be introduced for S&S ISAs next year.

Useful to note that MMFs are already one of the big purchasers of these bils, so increased issurance by the DMO helps them meet that demand.

itsme999

Hi everyone;

I have a bank fixed bond maturing on the 28th so need to invest somewhere. I note bank fixed rate bonds from 1 to 5 years offering over 5%.

The talk in the media is BoE will raise rates in November?

Which treasury guilts are recommended? Preferably up to 2 years

Thanks

wmb194

https://forums.moneysavingexpert.com/discussion/comment/82143541#Comment_82143541

For me which gilt depends on how much tax you pay on interest and how close the maturity date is to when you want your principal returned, though of course you can sell them in the market at any time.

If you’re not concerned about tax then I’d go for one with the highest running yield but if you are then go for a low coupon gilt trading below par (£100/£1) and take most of the gain as a tax free capital gain on maturity.

https://giltsyield.com/bond/

itsme999

https://forums.moneysavingexpert.com/discussion/comment/82143602#Comment_82143602

I pay 40% high rate tax so need low coupon, I don't need the money until maturity. Aiming for CG tax free on maturity.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82143943#Comment_82143943

The problem is that there aren't that many conventional ones left. You'd be looking at TN28 (maybe TG29)