Invest £10K in Premium Bonds or Halifax 1 yr Term Deposit at 6.5% gross

dreamybee

Hi,

I need a bit of advice - I have £10K in a halifax fixed term deposit which is due to expire this month - I already have an ISA - what do you think I should do - do you think it would be wise to invest the full amount in premium bonds or continue with the halifax fixed term deposit at 6.50% gross for 1 year. If I leave it in the fixed tem bond - at the end of the year, I should get about £650 interest.

I was just going to carry on with the halifax fixed term but then I thought I may get more back with the premium bonds - what do you think?

Lokolo

http://www.moneysavingexpert.com/savings/premium-bonds-calculator/

You are likely to get a return of less than 2.5% with premium bonds.....

debbie42

dreamybee wrote: »

do you think it would be wise to invest the full amount in premium bonds

Premium bonds can in no way be considered an "investment". I see them as a gamble, using the stake of the effective lack of interest you would be getting elsewhere.

isofa

I'd only suggest looking at PBs if you have plenty of money invested elsewhere and fancy a bit of fun, with no guarantee of any returns.

If earning interest on this money, is crucial to you, then stick to a good high interest account.

If you can lock it away for a while, I'd look at 7.01% fixed rate for 1 year from Icesave. All the best buys are listed here.

Jonbvn

PB's are a poor "investment" as explained by MSE Martin in this article.

If you are a tax-payer, you could consider index linked savings certificates. You have to hold them for a year to get any interest, but with RPI set to rise, they seem like a good bet ATM. http://www.nsandi.com/products/ilsc/index.jsp

matttttttttt

Halifax has a fixed 1 year web saver which pays 6.60 % gross,I put 10K in myself yesterday.
Firstsave have 1,2 and 3 year fixed web savers paying 7.10% which will get you an extra £50 if you want to invest in a non high street bank.

dunstonh

Would you place the money in a savings account and then every month withdraw the interest and buy lottery tickets with that? That what you are doing with Premium bonds except the Govt gets the cut and not Camelot.

If you are only looking at 1 year then you should avoid investments and stick with deposit based accounts.

[Deleted User]

Premium Bonds certainly won't be people's number one choice on here! I'm afraid to say, as Lokolo has pointed out with the calculator, the chances of winning anything are rubbish.

I'd suggest looking at the 1 - 3 year fixed rate accounts here:

http://www.thisismoney.co.uk/saving-and-banking/best-savings-rate/article.html?in_article_id=431812&in_page_id=50

You could also consider drip feeding a regular savings account (http://forums.moneysavingexpert.com/showthread.html?t=942779 and http://moneyfacts.co.uk/savings/bestbuys/regular-savings-accounts.aspx) while the rest of the money is in a top paying instant access account (http://www.thisismoney.co.uk/saving-and-banking/best-savings-rate/article.html?in_article_id=394164&in_page_id=50)

This concept (10% regular saver, 6% instant access = 8% overall) is discussed in more detail in a thread on here and for the life of me I can't seem to find it... If anyone can do the honours...

debbie42

Deleted_User wrote: »

This concept (10% regular saver, 6% instant access = 8% overall) is discussed in more detail in a thread on here and for the life of me I can't seem to find it... If anyone can do the honours...

There's an article on the basic concepts here:
http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

[Deleted User]

debbie42 wrote: »

There's an article on the basic concepts here:
http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

Thanks - not quite the one - it was on the savings forum. It could only have up to a week ago, probably less although searching for it isn't proving fruitful!

debbie42

Deleted_User wrote: »

Thanks - not quite the one - it was on the savings forum. It could only have up to a week ago, probably less although searching for it isn't proving fruitful!

You're just not looking hard enough
http://forums.moneysavingexpert.com/showthread.html?t=942779

message#6

p.s. I only found it as I was looking for something else: I'm not that obsessive, honest!