Bonds or Regular Saver

markd_2

I currently have 2 regular saver accounts (TSB & YBS). I have been looking at further regular saver accounts such as Skipton Special Saver and also at 1 year fixed bonds.

As you are effectively tied in with both, which are the best option? I appreciate that with the bond you have a guaranteed rate for the stated period.

Thanks

LittleVoice

markd wrote: »

I currently have 2 regular saver accounts (TSB & YBS). I have been looking at further regular saver accounts such as Skipton Special Saver and also at 1 year fixed bonds.

As you are effectively tied in with both, which are the best option? I appreciate that with the bond you have a guaranteed rate for the stated period.

Thanks

You can close the Skipton Special Saver.



(Clicked on Thanks instead of Quote!)

Cozworth806

You can only get the higher rate with a lower monthly deposit, so in month 1 you get interest on £250, whereas on the bond you get interest on the full £3000 for the year.

Someone clever than me can work out the difference.

I am investing in a Skipton SS account, and drawing the money down from my ICICI account to cover the deposits.

dunstonh

Bonds are looking good at the moment with yields getting to the 8.5% mark. However, I dont think you are talking about bonds but fixed term deposits.

jamesd

The Skipton regular savers are very convenient because you can close them. Open three Special Saver's and a Christmas saver and you can very rapidly get money into the high rate, then drop back to ten a month per account once the money is in and earninig the high rate.

This can also make them handy places to put the money that you'll later use to fund other regular savers - can load these up then close to free up the money when it's needed, effectively giving you a higher rate of interest on the feeder account money.

markd_2

You mention about the ability to 'close the account' with Skipton. Apologies if i'm being daft here but aren't you tied into the account for 12 months (and if you close the account before this point you don't receive the interest which is paid annually)?

Also are there any concerns re being locked in for 12 months and then the rate being heavily reduced?

Thanks

knights

markd wrote: »

You mention about the ability to 'close the account' with Skipton. Apologies if i'm being daft here but aren't you tied into the account for 12 months (and if you close the account before this point you don't receive the interest which is paid annually)?

Also are there any concerns re being locked in for 12 months and then the rate being heavily reduced?

Thanks

Hi markd,

You can close the account(s) prior to the anniversary and accumulated interest will be added. However as you can only put in a max of £250 pm into each account, (£1000pm if you have four), I am not sure if that would qualify as quote: 'you can very rapidly get money into the high rate' end quote, as posted by jamesd.

With regard to being locked in for 12 months as you can close the account(s) then you are not, however if you decide to run them for 12 months, which is what they are designed for, Skipton would then transfer the total into a low interest account and you might (would) be wise to move the money to something better.

regards

jamesd

You aren't tied in for twelve months with the Skipton variable rate accounts; you can close the account to get the deposits plus interest until the time of closing, without interest rate penalty.

Fixed rate accounts or even variable rate that are available from other places usually do have lock-ins and/or reduced interest rate penalties for withdrawing before the end of the term.

dunstonh

Lloyds used to be on death only if you wanted it before the end of the tie in. So it is certainly something to check when you buy a fixed term deposit.

Calchas

dunstonh wrote: »

Lloyds used to be on death only if you wanted it before the end of the tie in. So it is certainly something to check when you buy a fixed term deposit.

Kinda puts it all into perspective, doesn't it!

Fella

I've seen other bonds that basically said early payouts would be "at their discretion" too. Definitely important to understand the Ts & Cs of bonds.