Fixed rate - Notice Accounts

Krafty

Hi, I'll soon be in a position to open two Fixed Rate A/cs with £35k in each.

I'll have other A/cs for ISA and instant access.

My question is to those that have been saving (in Fixed Rate A'cs) for some time.

Initially I was tempted to open two a/cs with a fixed rate for 1 year, allowing me the option switching banks each year to maximise returns.

More recently (as Interest Rates have been falling), I've been considering maybe openning 1 x 1 year fixed rate a/c and 1 x 2 or 3 year fixed rate a/c.

I guess my question is this....

For those that have had experience of this scenario what are you findings/recommendations.

I'm open to all input but please could you state in your response whether you are an experienced saver, an amateur prophet or professional IFA.

Thanks in anticipation.

Krafty

tradetime

Basically you're trying to predict the future of interest rates, that's what it boils down to, I don't think rates will be higher this time next year than where they are now, but I wouldn't like to predict where they'll be this time 2010, I'm mostly in 1 year fixes from the last couple of weeks, with a couple of 6 months thrown in a 2 year and a 3 year Index linked from NS&I.

Oh, and I'm not an IFA or anything like that, just a short term speculator, so long term things are not my forte

geepster

Krafty wrote: »

Hi, I'll soon be in a position to open two Fixed Rate A/cs with £35k in each.

I'll have other A/cs for ISA and instant access.

My question is to those that have been saving (in Fixed Rate A'cs) for some time.

Initially I was tempted to open two a/cs with a fixed rate for 1 year, allowing me the option switching banks each year to maximise returns.

More recently (as Interest Rates have been falling), I've been considering maybe openning 1 x 1 year fixed rate a/c and 1 x 2 or 3 year fixed rate a/c.

I guess my question is this....

For those that have had experience of this scenario what are you findings/recommendations.

I'm open to all input but please could you state in your response whether you are an experienced saver, an amateur prophet or professional IFA.

Thanks in anticipation.

Krafty

I have most of my funds tied up in fixed rate accounts with the majority in 1 yr a/cs but I do have a couple of 2 yr a/cs but with smaller amounts (ie less than £35k). I think interest rates will continue to fall for this year at least. When you put your funds in fixed rate a/cs, you have to be content and relax because, it is possible, that once you have placed your funds, some institution will offer a fixed rate a/c paying more interest than yours. As long as your satisfied with the rate your getting that's all that matters. I speak from experience here as I put a large sum in a fixed rate a/c in Jan 2007 and shortly thereafter, better rates were available. But you're asking the question as interest rates are falling so, hopefully, you'll be ok.
Sorry for long winded reply.
I like to think I'm an experienced saver (and simply love this forum which I'm new to:j )

LardyCake

You might want to consider this: http://www.bankrate.com/brm/news/sav/2006savmg/cd-laddersa1.asp

Its a US site but the principle applies. Basically it suggest setting up a "ladder" of fixed rate savings with different terms, as savings mature you add them at the end of the ladder again.

I have my fixed rate savings organised this way, with a current average rate of 6.28% and the longest term being 3 years. The average includes some at 4.85% (due to mature soon)