Very Nervous, Advise Please?

jingle68

Hi, i invested £100k in a 6.75% 1 year bond with AngloIrish Bank (UK branch) in Jan 08. It was an inheritance, i do not have a large income or savings so i do not want to risk losing it. Should i close the bond,losing 4 months interest & then spread the £100k between different banks upto £35k each to be safe?

Thankyou in advance for any advice as i am very nervous about the current banking climate

Jingle 68

stevedb11

jingle68 wrote: »

Hi, i invested £100k in a 6.75% 1 year bond with AngloIrish Bank (UK branch) in Jan 08. It was an inheritance, i do not have a large income or savings so i do not want to risk losing it. Should i close the bond,losing 4 months interest & then spread the £100k between different banks upto £35k each to be safe?

Thankyou in advance for any advice as i am very nervous about the current banking climate

Jingle 68

Personally I would not want to lose that amount of interest, just because of all the recent speculation on here and in the papers, I would leave it where it is till the end of the 12 months, then split it if you are still nervous.
Ever since Northern Rock people seem to have gone a little paranoid.
just my opinion;)

RayWolfe

No, stick with it.
Of course there IS a chance that you could lose the balance over £35K, but the chance is minuscule. Stop worrying, or find something real to worry about!

McSaver

If you close the bond then the interest lost will be around £1,800.

Fella

I'll go against the prevailing climate of advice....

If you are "very nervous" then yes, you should move it.
If you can't afford to lose £65,000 then yes, you should move it.

I don't know exactly when in Jan you opened it, but I guess you stand to lose 3½ month's interest or slightly less. So maybe £1,900 / £1,500 / £1,200 (very approximately) depending on what rate of tax you pay.

It's extremely unlikely that AngloIrish (or probably any given bank) will go bust, but it's not impossible & no-one on here can say that it is. There's a reason the guarantee only goes up to £35K & that reason is in case it ever get's invoked.

So I think it all comes down to individual approach to risk & you've already said that you're very nervous & don't want to risk losing the money, which suggests to me that you should split your investments.

Of course it's highly likely that you'll look back in a year's time & conclude that doing so merely cost you 3+ months of interest. But that's the price you (we all) have to pay if we want to be covered by the FSCS.

regards
Fella

Baldur

jingle68 wrote: »

Should i close the bond,losing 4 months interest.......

See http://www.angloirishbank.co.uk/personal/fixed-rate-bond-faq.asp#7 paragraph 7, which suggest that the early withdrawal penalty is 60 days loss of interest for fixed rate bonds which have less than 1 year remaining to maturity.

jingle68

thanks for your replies guys