Premium bond / ISA

T T

Tuearts right boot

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Got a situation that hopefully the Money men on here can help with....I need to ' squirrel away' £30 k of my mums money, nothing to untoward and we must be able to withdraw it if the need arises. My FA has suggested 2 ISAs giving a return of 1.5% but a thought occured...My mum has some premium bonds £3,000 worth and we get about £100 / annum ( approx 3% ) back plus the chance.....of a biggy. At that rate £30k in PBs is a better return, based on past history. Ideally it needs to be kept out of my mums account and split equally between myself and my sister. Any thoughts or ideas....
 
The notional return from Premium bonds is 1.4% so you are bucking the trend.
You could get nothing for the next five years of course or you could win the big one million.
Considering the derisory rates in cash ISAs I’d keep it in premium bonds, reinvesting any winnings.


If you are trying to avoid impending care home fees it won’t work. Local authorities can scrutinise your mum’s account and have absolute discretion on deciding whether gifts of cash to you are trying to deprive assets from consideration of costs or not.
 
made the decision a few years back to load up the PB's, running at about 2.6% annually so better than a cash isa by some distance
 
For better interest, there a few bank accounts/savings accounts, that don’t have penalties:
https://www.moneysavingexpert.com/banking/compare-best-bank-accounts/#interest

Nationwide 5% on £2500, but requires £1000 per month pay in (which you take back same day) - as long as you haven’t had an account before. Your wife can get one as well, and you might be able to get a joint one as well. So that’s £7500 earning 5%. This is just for a year.

TSB 3% on £1500, but requires £500 per mint pay in (which you take back same day) . Your wife can get an account, and also a joint one. So that’s £4500 earning 3%. This appears to be indefinite, till they change rates.

Bank of Scotland and Lloyd’s have 2% on 4000-5000 balances (still needs a pay in) and you can have multiple accounts. This appears to be indefinite till they change rates.

To do the pay-ins/payouts you need to plan and know when things happen. You also need the maximum pay in available as cash to move around. Basically you pay X in from Y, and on the same day Y into X. Ditto for A into B etc, but make sure the pairs are 5 days different to cover weekends and bank holidays backing up payments.

setting it all up can be a bit daunting, but once done it just works. Best to do it online/app, as long as you are completely happy with your devices being secure. Also keep track of when/who gets what somewhere safe.
When the bank removes/reduces the rate, make sure you cancel both standing orders in and out.
And clearly when you eventually move money out, make sure you cancel the standing orders!

there used to be many dripfeed/regular savings accounts earning 5%, but they’ve all gone now.
 
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I opened a shares ISA with Royal London about 2 years ago I put £5k in and its currently at around £6.5k it was in their European growth fund, I can withdraw any time, might be worth looking at but like all shares is a gamble and should be viewed as long term
One down side is you can't just top up by transfer etc you need to physically send a check which is a nuisance
 
JASR said:
For better interest, there a few bank accounts/savings accounts, that don’t have penalties:
https://www.moneysavingexpert.com/banking/compare-best-bank-accounts/#interest

Nationwide 5% on £2500, but requires £1000 per month pay in (which you take back same day) - as long as you haven’t had an account before. Your wife can get one as well, and you might be able to get a joint one as well. So that’s £7500 earning 5%. This is just for a year.

TSB 3% on £1500, but requires £500 per mint pay in (which you take back same day) . Your wife can get an account, and also a joint one. So that’s £4500 earning 3%. This appears to be indefinite, till they change rates.

Bank of Scotland and Lloyd’s have 2% on 4000-5000 balances (still needs a pay in) and you can have multiple accounts. This appears to be indefinite till they change rates.

To do the pay-ins/payouts you need to plan and know when things happen. You also need the maximum pay in available as cash to move around. Basically you pay X in from Y, and on the same day Y into X. Ditto for A into B etc, but make sure the pairs are 5 days different to cover weekends and bank holidays backing up payments.

setting it all up can be a bit daunting, but once done it just works. Best to do it online/app, as long as you are completely happy with your devices being secure. Also keep track of when/who gets what somewhere safe.
When the bank removes/reduces the rate, make sure you cancel both standing orders in and out.
And clearly when you eventually move money out, make sure you cancel the standing orders!

there used to be many dripfeed/regular savings accounts earning 5%, but they’ve all gone now.
Click to expand...

a regular saving account offering 5% is an APR of 2.5%
 
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