Yorkshire Building Society - 2 Year Fixed Rate Bond

ManAtHome

KeithEssex wrote: »

Sure - I appreciate that but I still have major concerns about such a small country (population, reserves etc.) resolving a major banking crisis whilst they are struggling with their economy being in a right mess ! Even with the help of their neighbours.

Their neighbours have a heap more dosh than poundland plc (the Norway oil fund is nearly as big as the poundland personal debt fund). Oh, and when Iceland inflation goes up they increase interest rates to damp things down a bit - bit of an alien concept, but there you go...

I still reckon the Icelandic economy is a bit bigger/better than a couple of northern rocks.

KeithEssex_2

ManAtHome wrote: »

Their neighbours have a heap more dosh than poundland plc (the Norway oil fund is nearly as big as the poundland personal debt fund). Oh, and when Iceland inflation goes up they increase interest rates to damp things down a bit - bit of an alien concept, but there you go...

I still reckon the Icelandic economy is a bit bigger/better than a couple of northern rocks.

You're probably right but the fundamentals for the country still seem scary :eek:

Thank goodness for the FSCS "guarantee" in respect of Kaupthing. Having said that I've opened accounts with both them (and even ICESAVE) because the rates are so good

KeithEssex_2

ManAtHome wrote: »

It may be - there were better 2 year rates on offer when "the crunch" was "over real soon now" 6 months ago. Currently sticking to the 1 year rates around 7%, possibly more to come next year when (IMHO) times may be harder.

Agreed - the 2 year rates (generally in the market) don't seem good enough for such a "long" term commitment.

By my calculations the AVERAGE rates for the major (better) players are currently as follows:-

6 Month - 6.68
1 Year - 6.50
2 Years - 6.35

On that basis I don't fix beyond a year at the moment.

Paul_Herring

KeithEssex wrote: »

For a TWO year rate it is only beaten (to my knowledge) by ICESAVE at 6.60%.

Even 6.6% for a TWO year fix is crap. You're taking a massive gamble that (e.g.) the BOE or LIBOR don't creep up in those two years.

You may just as well stick it in the stock market for those two years.

martinman3

Paul_Herring wrote: »

Even 6.6% for a TWO year fix is crap. You're taking a massive gamble that (e.g.) the BOE or LIBOR don't creep up in those two years.

You may just as well stick it in the stock market for those two years.

I agree with you that these rates are not really good enough.

I did a calculation using the RPI figures for the last three months and found that the RPI has risen 2% in that time. If it continues like that you will need a return of 8% AER after tax just to keep up with inflation.:eek:

aleph_0

martinman3 wrote: »

I agree with you that these rates are not really good enough.

I did a calculation using the RPI figures for the last three months and found that the RPI has risen 2% in that time. If it continues like that you will need a return of 8% AER after tax just to keep up with inflation.:eek:

A similar calculation will give a similar figure of 1.88% for those same three months last year, so you could have concluded this time last year that you would need a return of 7.5% after tax for 2007 to keep up with inflation! There are obviously more risks to inflation this year, but looking at what appear to be traditionally 3 months where prices increase the most, and generalising for the year, is not a useful way to predict this.

Ah, the power of statistics.

martinman3

aleph_0 wrote: »

A similar calculation will give a similar figure of 1.88% for those same three months last year, so you could have concluded this time last year that you would need a return of 7.5% after tax for 2007 to keep up with inflation! There are obviously more risks to inflation this year, but looking at what appear to be traditionally 3 months where prices increase the most, and generalising for the year, is not a useful way to predict this.

Ah, the power of statistics.

I agree that basing the annual rate on 3 months is suspect. It would be nice to have a time machine, jump forward 12 months, and then tell you what the annual rate is/was.:)

Originally, my intention was to find out how well NS&I Index Linked certs were currently performing compared to variable ISAs and fixed rate bonds and the answer is much much better, although you can't cash them in for 12 months else you lose the interest.

I should add that all variable rate accounts linked to the base rate quote an AER % which cannot be guaranteed for 12 months as the base rate may change. People decide whether to open fixed or variable rate accounts based on this AER and they should also consider Index Linked savings which for the last three months have out-performed them both.