OT - The Savings Game

Excellent time (imo) to initiate a bond ladder.

.https://www.fidelity.com/viewpoints/investing-ideas/bond-ladder-strategy

We have taken out 5 year bonds.

Can't be sure, but seems a good balance to include them.

I feel like it's the right time personally, but got to be careful with the potential tax liability.

It will come down to politics vs economics. Most likely outcome I believe is that the BoE will cave in and reduce rates as soon as they think they can get away with it.

IT's are worth looking at too. Inherent capital risk but they are available yielding 5-7% and will see capital growth if rates fall. And can also be shielded in a S&S ISA.

But cash is appealing at circa 6% due to the guaranteed investment.

.https://uk.virginmoney.com/savings/products/3_year_fixed_rate_cash_e_isa_is...

Could get reasonably interesting now with base rate being nudged up as expected, and inflation on the downward curve. Could we possibly get a flip, and savings will provide growth in real terms ?

I'm getting over 10% on the s&p 500.

This is supplementing equity investments. People should have a lump of cash outside of volatile assets.

Like the S&P, not very volatile for many years.

Up 60% in 5 years.

I'm talking about the next 5 years, not the last. No point in comparing cash to equities when base rates were on the floor. This is where strategies need to adapt to the changing environment.

I'm just having a laugh with you Cider

I am in the 500 though.

NS&I offers highest ever interest rate for one-year fixed rate Guaranteed Growth Bonds and Guaranteed Income Bonds

New Issues of one-year fixed rate Guaranteed Growth Bonds and Guaranteed Income Bonds are on sale from today at 6.20% gross/AER and 6.03% gross/6.20% AER respectively

It's a very short term approach.

Long term through history you will make more in ordinary mid caps or above, or in the S&P, you will also be losing purchasing power over time.

It's a must in my view to have a cash holding, what proportion of their wealth is up to the individual. A cash bond ladder strategy is hard to argue with.


From my own personal perspective (not the reason for this thread), I have a fixed rate on my mortgage until late 2028, which the current best savings rate smashes. So inflation is not particularly relevant there. My aim is to have a cash pot that could settle the mortgage at the end of the term. I'll review my options then. I doubt I will pay it all off, but I would like that as an option.

You'll know this but for any reader, you want to be able to get your hands on cash that covers at least 3 months bills at any given time. The Virgin Money cash ISA (3 yr bond) was great for that as they allow access any time (for a modest penalty).

Yes, I get that,it is so. Access to a percentage of cash is required.

Good luck with the mortgage, you are getting there in sure.

Ta, it's always a juggling/balancing act. Before this realignment of interest rates I was concentrating on pensions to get the tax back. But locking in that rate when I saw it coming means that I effectively have over 7 years of deflation of my capital liability. So I've realigned my own strategy accordingly. I'm still putting plenty in pensions and taking advantage of SalSac, but this new situation of normalised interest rates has changed the game somewhat.

NS&I launches 6.2% one-year fixes
NS&I, formerly National Savings, has launched a massive best-buy fix, beating every other fix on the market -

Government buying cash?

Santander Easy Access Saver Limited Edition 5.2% (variable) for 12 months

.https://www.santander.co.uk/personal/savings-and-investments/savings/easy-access-saver

Just a week left max to the advertised closing date.

^

Santander's top 5.2% easy-access savings deal ends TONIGHT
Santander's bumper 5.2% easy-access account is being pulled from tonight
Savers can still get this account if they apply before 11.59 this evening

Ive got money in the the new Santander easy access account and a chip easy access account. Also feel like the peak is nigh so will be looking to fix in bonds for as long as possible.

Surprising the market (but not I), BoE presses hold on the Bank's rate. Not sure 6+ will be around for too much longer, over any time span.

Cider knows what he is talking about .. not going to check

Everything on the market now sub 6%

Hopefully you all filled you boots, as expected interest rates are declining, and the elevated rates won't be back for a long time.

Loophole for anyone who didn't know, you can open a Santander Edge current account and then an Edge savings account, and fund the savings account with 4k, paying 7% interest. The  information when setting the current account up talks about funding the account with 500 pcm, having 2 active DDs and there is a £3pcm account fee. But if you don't fund the account or set up the DDs, then you don't pay the fee. It pays a cashback on bills anyway, so you might want to set up the DDs and regular funding anyway. Might be a good time to get hold of that 7% account though. IR is variable and the top up to 7% is a 12mnth bonus, more than likely the 7%ers will be left and a new issue at a lower rate (if they want to lower rates).

Base rate shifted slightly down so doubt we'll see the juiciest savings rates for a good while. Plan working quite nicely and now we're actually getting growth on capital held in cash in real terms :)

Virgin have recently launched a 10% regular saver!

250 pm max, conditions are pretty simple but must have a Virgin current account to apply, or open a new one. about £160 for 10 minutes tapping.

.https://uk.virginmoney.com/savings/products/regular_saver_exclusive_issue_1/

.https://www.principality.co.uk/home/savings/savings-accounts/christmas-2025-regular-saver-bond

7% RS fixed for year, 125 pcm max but easy money (tax accepted)