Bonds Or Isas

[postman44]

Which is best to invest money in for two years.a bondvor an isa. Thank you

[ubasses]

I am assuming you mean cash bonds and not Corporate or Government Bonds. Bonds usually have slightly higher interest rates as the they know the specific term your investment. Your tax position on interest paid would then need to be taken into account as whether the higher rate would be of any benefit. Any of the comparison sites will give you the current rates.

[postman44]

Thank you ubasses for your prompt answer. Stay safe and healthy

[fiction-factory]

Neither will give you much interest though. If you invest £1000 you'll probably get something like £1030 at the end of 2 years and your money will have been tied up. Unless you have a huge savings pot it's unlikely you'll be taxed on the interest from a bond so an ISA has no short term tax advantages. So just go for the best interest rate. Or just draw down on the money and spend it as you can't take it with you depending on your age

[maggiebee]

Was reading the Martin Lewis site last night. His advice at the moment was to have a look at your bank's regular saver accounts. Interest is tax free and, at the moment, you can get a better rate than you will from an ISA.

[fiction-factory]

Yes, the rates have been quite good on regular savers- 2%-5% -although these are being reduced for new ones so 1.5-2.5% is more common now.
The drawback though if you have a lump sum is that you have to drip feed the money in over the year, and often there is a maximum of around £200pm
For example £200 a month at 3% pa would mean your £2400 would grow by only £40 or so over the year.

[ubasses]

Problem with a regular saver is most of the mainstream Banks/Building Societies only allow you to put in around £250/£300 per month, depending on how much Postman has to invest over a year he will only be able to utilise £3000 of his funds and the higher interest is not necessarily beneficial as it only being accrued at small amounts during the early months.

[bhg481]

Nationwide are currently not offering regular savings accounts. Ours have just matured and we can't open another one.

[ubasses]

BHG, the following are doing them: Lloyds, First Direct, HSBC, M&S and Coventry, all with online accounts.

[bhg481]

ubasses - I have one with HSBC but I'll have a look and see if your other suggestions allow them for non current account holders.