Looking for best 1 year fixed rate bond/ gilt

silvercar

TG27 for a higher rate tax payer for a short term fix is worth a look.

itsme999

https://forums.moneysavingexpert.com/discussion/comment/82144211#Comment_82144211

I already have TN28 from few months ago. I have to decide which of the two to go for.

efunc

These are the three I've identified as attractive for a 40% tax payer if held in a GIA (in my case probably II):Gilt

Coupon

Gross yield

Matures

Approx. price

Capital gain per £100 nom.

% of return tax-free

After-tax yield (40%)

After-tax yield (20%)

TR29	0.875%	4.935%	Oct 2029	~£88.70	~£11.30 (12.7%)	81%	~4.51%/yr	~4.69%/yr
TG29 Most efficient	0.500%	4.856%	Jan 2029	~£90.62	~£9.38 (10.3%)	89%	~4.62%/yr	~4.73%/yr
TG28	1.625%	4.834%	Oct 2028	~£93.79	~£6.21 (6.6%)	65%	~4.13%/yr	~4.46%/yr

efunc

Actually, since I last looked the net yield (@40%) on TN28 is more favorable than TG28, so I'm selecting that instead.

0 1/8% Treasury Gilt 2028 TN28 · GB00BMBL1G81 - 4.261%

1 5/8% Treasury Gilt 2028 TG28 · GB00BFX0ZL78 - 3.993%

https://giltsyield.com/bond/?settlement_delay=T%2B1&tax_rate=40

efunc

https://forums.moneysavingexpert.com/discussion/comment/82095533#Comment_82095533

Why is this preferable to allocating the cash to a Money Market fund in your SIPP? Only slightly more volotile, but essentially my Royal London Short Term Money Mkt Y Acc is paying about 4% and is good for a bit of liquidity while I rebalance.

kermchem

https://forums.moneysavingexpert.com/discussion/comment/82145568#Comment_82145568

In a SIPP everything is tax free until you take it out. In a GIA the coupon on a gilt is subject to income tax but the capital growth at maturity is not subject to income tax or CGT. Depends where your money is and your tax position. Horses for courses.

itsme999

I think I'm going for the TN28 but am a bit concerned with market changes which may happen due to the rise of petrol/diesel prices, effects on the economy and interest rates, opinions on this please? Is it wise to go for the TN28 today? The yield of 4.29% most of it tax free is excellent, it is equivalent to over 7% for a 40% tax payer.

The bank bonds matured, funds available but a bit hesitant to go ahead, the alternative would be easy access account 4% interest gross 2.4% interest net after 40% tax.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82151494#Comment_82151494

Personally if I have decided to buy something I try not to worry about whether I could buy it cheaper tomorrow or the next day. I just take it as read that if I buy it the price will fall almost immediately. If it is any comfort I shall not be buying TN28 tomorrow.

NoMore

Once you buy it and if you hold it to maturity, then it doesn't matter what happens as you know your exact returns and when you receive them, this will not change no matter what happens to the economy (except a very extreme scenario where the UK government defaults, which is extremely unlikely and is really not a consideration to be worth worrying about). If your happy with the return you will get based on buying today then buy it and collect your coupons and the maturity value when it matures.

If your worried that you may want to sell early then yes, you may lose out, but holding maturity guarantees your return. Or If you want to wait and see if the yield will increase because the price drops, before buying then that's a gamble.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82151494#Comment_82151494

You won't be able to time the market perfectly. Every day at net 2.4% raises the bar on how much higher TN28 yield will have to go for you to be better off waiting.