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Is anyone investing in fixed rate cash deposits again?
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Raj K
Posted: 23 August 2022 12:08:35(UTC)
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I just looked on MSE and you can get one year fixed deposits at 3.2% (monument bank)

Has anyone started deploying their cash into fixed deposits?

Looking to find a better return for monies from a recent remortgage.

I am thinking of just deploying 1/10th of my cash into the best 1 year fixed rate deposit every month creating in effect my own bond fund with maturities every 10 months so its not like locking it away for ever. Bit tedious to manage but currently only getting 1.75 in my shawbrook account. Also if rates rise i will be able to benefit from higher rates as i go on.

If the stock market present itself with better value at any given time i can forego that months deposit and deploy into stock market.



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ANDREW FOSTER on 23/08/2022(UTC), kim shillinglaw on 23/08/2022(UTC), Harry Trout on 02/10/2022(UTC)
xxd09
Posted: 23 August 2022 12:26:55(UTC)
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Much over £60000 in an instant high interest account (1.6%) takes you over £1000 interest allowance
Cash ISA eg Coventry BS) could shelter another £20000 admittedly only 1.25% at the moment
Rising interest rates posing a welcome tax problem for investors/retirees with cash on the side for day to day living expenses
xxd09
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Raj K on 23/08/2022(UTC), TJL on 23/08/2022(UTC), Jimmy Page on 23/08/2022(UTC), xiang zou on 25/08/2022(UTC), mcminvest on 29/09/2022(UTC), MBA MBA on 30/10/2022(UTC)
Bulldog Drummond
Posted: 23 August 2022 12:30:06(UTC)
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Having no tax free allowance on interest and paying 45% on every penny I find it hardly worth bothering to put money on deposit at current inflation and interest rates.
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6 users thanked Bulldog Drummond for this post.
Ian Eccles on 23/08/2022(UTC), Raj K on 23/08/2022(UTC), bédé on 23/08/2022(UTC), Captain Slugwash on 23/08/2022(UTC), xiang zou on 25/08/2022(UTC), MBA MBA on 30/10/2022(UTC)
Ramondo
Posted: 23 August 2022 12:41:39(UTC)
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Yes, I am.
I've always invested in both fixed rate bonds ( 95% have been up to 1 year term) and also in various notice accounts.
When the markets are good, very little in fixed term, when markets in decline as they have been recently, interest rates rise then I invest a lot in 6 month to 1 year bonds.
It's guaranteed as at you say 3.1% ish, how many of us at the moment can state that they will make more than 3.1% on investments guaranteed?
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Raj K on 23/08/2022(UTC), xiang zou on 25/08/2022(UTC)
Raj K
Posted: 23 August 2022 12:48:24(UTC)
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xxd09;235666 wrote:
Much over £60000 in an instant high interest account (1.6%) takes you over £1000 interest allowance
Cash ISA eg Coventry BS) could shelter another £20000 admittedly only 1.25% at the moment
Rising interest rates posing a welcome tax problem for investors/retirees with cash on the side for day to day living expenses
xxd09


I guess if one needs the liquidity/access to cash then earning an extra £500 and paying some tax is better than not earning the £500. I had very low levels of cash early in the year and just did the remortgage on investment property to both secure a fixed rate at lower levels and provide some liquidty incase things went belly up in the world. Just need to try and make the best return I can on it, even though i will be a net looser with inflation the way it is but it does provide optionality.
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kim shillinglaw on 23/08/2022(UTC)
Ian Eccles
Posted: 23 August 2022 12:48:56(UTC)
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If you want to go down that route Raj, consider holding off because interest rates will probably still be on the march upwards.
There are plenty of dividend stocks paying better rates than cash deposits, Phoenix Group Holding goes EX Div this Thursday paying 24.8p/ share ( declare an interest ) payment day September 12th.
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5 users thanked Ian Eccles for this post.
Bulldog Drummond on 23/08/2022(UTC), Raj K on 23/08/2022(UTC), ANDREW FOSTER on 23/08/2022(UTC), kim shillinglaw on 23/08/2022(UTC), xiang zou on 25/08/2022(UTC)
Raj K
Posted: 23 August 2022 13:00:05(UTC)
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Ian Eccles;235673 wrote:
If you want to go down that route Raj, consider holding off because interest rates will probably still be on the march upwards.
There are plenty of dividend stocks paying better rates than cash deposits, Phoenix Group Holding goes EX Div this Thursday paying 24.8p/ share ( declare an interest ) payment day September 12th.


Yep wont be deploying the first batch until after the next interest rate decision which i believe will be on Sep 15th. Really just want to be risk off on this portion of monies as its the only cash I have and i need reasonable access hence the laddered approach.
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Sara G
Posted: 23 August 2022 13:10:59(UTC)
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I tend to think that if I'm willing to lock the money away for a year, I can probably come up with a better idea than cash, but I have put some in a 6 month account at 1.85% which will be spent on building works in the next 6 - 12 months. The rest of my cash is in Easy Access accounts at 1 - 1.25%.

NB Santander just put the interest on their 123 account back up to 1% on the first 20K. I can't believe I got excited about that given where inflation is, but every little helps I suppose...
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3 users thanked Sara G for this post.
Raj K on 23/08/2022(UTC), Jimmy Page on 23/08/2022(UTC), kim shillinglaw on 23/08/2022(UTC)
Raj K
Posted: 23 August 2022 13:32:32(UTC)
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Sara G;235680 wrote:
I tend to think that if I'm willing to lock the money away for a year, I can probably come up with a better idea than cash, but I have put some in a 6 month account at 1.85% which will be spent on building works in the next 6 - 12 months. The rest of my cash is in Easy Access accounts at 1 - 1.25%.

NB Santander just put the interest on their 123 account back up to 1% on the first 20K. I can't believe I got excited about that given where inflation is, but every little helps I suppose...




Didn't think about six month options! I even see zopa do a 31 day notice account at 1.95%.

I remember the Santander 123 accounts were all the rage when they were paying 1.5% and easy access saving acounts were paying much less. Now the tables have turned I closed one of my 123 accounts.

Suppose i could dump it in RICA/PNL/CGT but there is still some risk there no matter what they say.
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3 users thanked Raj K for this post.
Sara G on 23/08/2022(UTC), kim shillinglaw on 23/08/2022(UTC), xiang zou on 25/08/2022(UTC)
bédé
Posted: 23 August 2022 13:38:16(UTC)
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Bulldog Drummond;235668 wrote:
Having no tax free allowance on interest and paying 45% on every penny I find it hardly worth bothering to put money on deposit at current inflation and interest rates.

As an impecunious pensioner and paying minimum income tax as evrtything is sheltered, banks and building societis have no interest (ha!) for me. Everything in the ISAs fro total return (it will return), and a tiddy bit in CGAR &/or CGT fo expected future spend.

PS. My typing looks a bit like apres dejeuner, ot diner as we say in Belgium (or oop North).
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1 user thanked bédé for this post.
Raj K on 23/08/2022(UTC)
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