Got a credit card? use our Credit Card & Finance Calculators
Thanks to Anonymous,bruncher,niord,gvonge,Shelford, for Donating to support the site
NSandI 3yr Green Bond at 0.65%
-
- Lemon Slice
- Posts: 461
- Joined: March 3rd, 2019, 12:25 pm
- Has thanked: 177 times
- Been thanked: 246 times
NSandI 3yr Green Bond at 0.65%
Which is the same rate availble on a instant access account.
The general public get screwed over again. Institutions get 0.75% on a 3 year gilt.
The general public get screwed over again. Institutions get 0.75% on a 3 year gilt.
-
- Lemon Half
- Posts: 6127
- Joined: November 21st, 2016, 4:26 pm
- Has thanked: 448 times
- Been thanked: 2361 times
Re: NSandI 3yr Green Bond at 0.65%
Gan020 wrote:Which is the same rate availble on a instant access account.
The general public get screwed over again. Institutions get 0.75% on a 3 year gilt.
The general public can buy those same gilts too (and accept the variability and risk of capital movement). Where precisely is this "screwed over" taking place please?
-
- Lemon Quarter
- Posts: 1589
- Joined: November 4th, 2016, 3:54 pm
- Has thanked: 33 times
- Been thanked: 477 times
Re: NSandI 3yr Green Bond at 0.65%
I've never been prepared to tie money up for 3 years. With inflation rising, fixing interest at 0.65% doesn't sound like a good idea to me. I'm gonna give it a miss.
-
- Lemon Half
- Posts: 5384
- Joined: November 4th, 2016, 12:04 pm
- Has thanked: 3339 times
- Been thanked: 1054 times
Re: NSandI 3yr Green Bond at 0.65%
richlist wrote:I've never been prepared to tie money up for 3 years. With inflation rising, fixing interest at 0.65% doesn't sound like a good idea to me. I'm gonna give it a miss.
Indeed. especially when the rate is hardly (0.5%/) better than an instant access account elsewhere anyway, and in fact less (0.5%) for only tieing your cash up for 120 days.
-
- Lemon Slice
- Posts: 461
- Joined: March 3rd, 2019, 12:25 pm
- Has thanked: 177 times
- Been thanked: 246 times
Re: NSandI 3yr Green Bond at 0.65%
dealtn wrote:Gan020 wrote:Which is the same rate availble on a instant access account.
The general public get screwed over again. Institutions get 0.75% on a 3 year gilt.
The general public can buy those same gilts too (and accept the variability and risk of capital movement). Where precisely is this "screwed over" taking place please?
Ok, point well made. As a matter of interest how would I go about actually buying gilts. I'm interested in the inflation linked ones but I'm sure the principle is just the same.
-
- Lemon Quarter
- Posts: 1967
- Joined: June 21st, 2017, 12:02 am
- Has thanked: 263 times
- Been thanked: 970 times
Re: NSandI 3yr Green Bond at 0.65%
Gan020 wrote:dealtn wrote:Gan020 wrote:Which is the same rate availble on a instant access account.
The general public get screwed over again. Institutions get 0.75% on a 3 year gilt.
The general public can buy those same gilts too (and accept the variability and risk of capital movement). Where precisely is this "screwed over" taking place please?
Ok, point well made. As a matter of interest how would I go about actually buying gilts. I'm interested in the inflation linked ones but I'm sure the principle is just the same.
Index linked gilts trade at negative real yields. In other words you are guaranteed to lose money in real terms.
There are queues of pension funds effectively forced to buy them. As a result they are expensive. As a private investor, don’t bother, unless you have a really strong view that U.K. inflation will explode.
-
- Lemon Quarter
- Posts: 4832
- Joined: November 14th, 2016, 7:33 pm
- Has thanked: 182 times
- Been thanked: 1392 times
Re: NSandI 3yr Green Bond at 0.65%
JN Bank is Money Saving Expert's best buy for a 3 year bond:
https://www.moneysavingexpert.com/savin ... -interest/
It pays 1.81% p.a. The government's green bond is rubbish. Here are the yield curves for index linked gilts:
https://www.bankofengland.co.uk/statistics/yield-curves
The inflation rate at which index linked gilts return the same as conventional gilts is above the Bank of England's target inflation rate of 2%, but the inflation rate is above that level too. The 2% target is subject to satisfactory growth and employment:
https://www.bankofengland.co.uk/-/media ... t-2021.pdf
"The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet
the 2% inflation target, and in a way that helps to sustain growth and employment."
Relative to conventional gilts, index linked gilts are a reasonable buy. They are not subject to CGT and some have coupons of 0.125%, so there is not much income tax to pay either. Nonetheless, conventional gilts pay rubbish interest rate in comparison with the best savings accounts. Cash ISA rates are not as good, and transferring ISAs is currently a nightmare.
You can buy gilts directly through a stockbroker. The retail spreads are wide for small trades but reasonable for trades of £50K plus. You can also buy units or shares in gilt funds.
https://www.moneysavingexpert.com/savin ... -interest/
It pays 1.81% p.a. The government's green bond is rubbish. Here are the yield curves for index linked gilts:
https://www.bankofengland.co.uk/statistics/yield-curves
The inflation rate at which index linked gilts return the same as conventional gilts is above the Bank of England's target inflation rate of 2%, but the inflation rate is above that level too. The 2% target is subject to satisfactory growth and employment:
https://www.bankofengland.co.uk/-/media ... t-2021.pdf
"The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet
the 2% inflation target, and in a way that helps to sustain growth and employment."
Relative to conventional gilts, index linked gilts are a reasonable buy. They are not subject to CGT and some have coupons of 0.125%, so there is not much income tax to pay either. Nonetheless, conventional gilts pay rubbish interest rate in comparison with the best savings accounts. Cash ISA rates are not as good, and transferring ISAs is currently a nightmare.
You can buy gilts directly through a stockbroker. The retail spreads are wide for small trades but reasonable for trades of £50K plus. You can also buy units or shares in gilt funds.
-
- Lemon Quarter
- Posts: 4832
- Joined: November 14th, 2016, 7:33 pm
- Has thanked: 182 times
- Been thanked: 1392 times
Re: NSandI 3yr Green Bond at 0.65%
The 0.125% new style index linked gilts have to be dealt on the telephone. Other gilts can be dealt online by some brokers. You may get narrower spreads for smaller trades on these. Have a look and see what you are quoted.
-
- Lemon Quarter
- Posts: 2032
- Joined: November 4th, 2016, 10:25 am
- Has thanked: 227 times
- Been thanked: 481 times
Re: NSandI 3yr Green Bond at 0.65% - (now 1.3%)
New issue at 1.3%
Issue 2: 1.30% gross/AER, fixed for 3 years
https://www.nsandi.com/products/green-savings-bonds
Issue 2: 1.30% gross/AER, fixed for 3 years
https://www.nsandi.com/products/green-savings-bonds
-
- Lemon Half
- Posts: 6385
- Joined: November 4th, 2016, 11:35 am
- Has thanked: 1882 times
- Been thanked: 2026 times
Re: NSandI 3yr Green Bond at 0.65%
Not taxable until maturity, so may be a good way to move income to post-retirement when one may be in a lower tax bracket
-
- Lemon Quarter
- Posts: 2032
- Joined: November 4th, 2016, 10:25 am
- Has thanked: 227 times
- Been thanked: 481 times
Re: NSandI 3yr Green Bond at 0.65%
AleisterCrowley wrote:Not taxable until maturity, so may be a good way to move income to post-retirement when one may be in a lower tax bracket
Max £100K so only £1300 taxable income to shift. (p.a.)
Best 3-yr fixed cash ISA rates currrently beat this rate - although you can't put £100k of new money in them...
-
- Lemon Half
- Posts: 5384
- Joined: November 4th, 2016, 12:04 pm
- Has thanked: 3339 times
- Been thanked: 1054 times
Re: NSandI 3yr Green Bond at 0.65%
Im probably missing something but MSM suggests there are plenty of other institutions offering a 3 year lock in for substantially higher returns - 1.92% with Al Rayan for example.
-
- Lemon Half
- Posts: 8014
- Joined: November 4th, 2016, 11:24 am
- Has thanked: 7 times
- Been thanked: 3087 times
Re: NSandI 3yr Green Bond at 0.65%
didds wrote:Im probably missing something but MSM suggests there are plenty of other institutions offering a 3 year lock in for substantially higher returns - 1.92% with Al Rayan for example.
And there are even better normal accounts (not Sharia) offering higher rates for a 1 year fix.
Of course NS&I rates should be a tad lower than the market 'cos of being backed by the Treasury, but much more than that NS&I's rates reflect the desire of HMG to borrow, which, having borrowed gazillions in the past couple of years, is pretty low at the moment. Consequently all of NS&I's interest rates are uncompetitive currently, with some, like the Investment Account, even being at 0.01%. Methinks it's pretty clear they're not trying to attract new money into that.
Indeed, even the number of accounts they have on offer is pretty low at the moment. Compare with what's been available in the past. https://www.nsandi.com/historical-interest-rates.
The Index Linked Certificates are the most missed on these boards, I reckon. The Green Bonds are, of course, really a political offering. Uncompetitive, yeah, HMG doesn't really want your money, but NS&I is an institution and has to keep ticking over nevertheless....
-
- Lemon Half
- Posts: 6385
- Joined: November 4th, 2016, 11:35 am
- Has thanked: 1882 times
- Been thanked: 2026 times
Re: NSandI 3yr Green Bond at 0.65%
What's the three year Gilt yield now? I'm never quite sure how to read some of the data - looks like 1.35% ish
-
- Lemon Half
- Posts: 8014
- Joined: November 4th, 2016, 11:24 am
- Has thanked: 7 times
- Been thanked: 3087 times
Re: NSandI 3yr Green Bond at 0.65%
AleisterCrowley wrote:What's the three year Gilt yield now? I'm never quite sure how to read some of the data - looks like 1.35% ish
The closest to a 3 year gilt (listed on HL at least) is the Treasury 5% 2025. maturing 7-Mar-2025
https://www.hl.co.uk/shares/corporate-b ... &order=asc
https://www.hl.co.uk/shares/shares-sear ... ury-5-2025
Bunging the current buy price (111.20), the coupon (5%) and years to maturity (3) into http://www.candidmoney.com/calculators/ ... calculator gives a redemption yield of 1.18%. The running yield of 4.5% will be taxable, as interest (if not in an ISA etc), while the capital loss will not be usable against other gains, as gilts are CGT free.
-
- Lemon Half
- Posts: 6385
- Joined: November 4th, 2016, 11:35 am
- Has thanked: 1882 times
- Been thanked: 2026 times
-
- Lemon Half
- Posts: 8014
- Joined: November 4th, 2016, 11:24 am
- Has thanked: 7 times
- Been thanked: 3087 times
Re: NSandI 3yr Green Bond at 0.65%
AleisterCrowley wrote:https://www.cnbc.com/quotes/GB3Y-GB
???
Ugh! What a useless page! No proper name (gilts aren't called anything like "British 3 Year Gilt"!), no ISIN or other identifier, and no indication what the yield referred to actually is, leaving the reader to intuit that it's the redemption yield (not the running yield).
Ok, so on a little investigation, https://www.dmo.gov.uk/data/pdfdatareport?reportCode=D1A, this seems to be 0¼% Treasury Gilt 2025 GB00BLPK71, and we can find prices for that at https://www.londonstockexchange.com/stock/TN25/united-kingdom/company-page.
Bunging the current buy price (97.24), the coupon (0.25%) and years to maturity (3) into http://www.candidmoney.com/calculators/ ... calculator gives a redemption yield of 1.19%. Using the sell price (96.74) instead gives 1.37%, but of course you can't buy it at the sell price ...
-
- Lemon Half
- Posts: 6385
- Joined: November 4th, 2016, 11:35 am
- Has thanked: 1882 times
- Been thanked: 2026 times
Re: NSandI 3yr Green Bond at 0.65%
That's a big spread? Or is there some shenanigans with clean and dirty prices?
Yeah, I assumed it was the yield to maturity quoted. Isn't that based on the buy price ?
(you can see why I avoid bonds)
Yeah, I assumed it was the yield to maturity quoted. Isn't that based on the buy price ?
(you can see why I avoid bonds)
-
- Lemon Half
- Posts: 5384
- Joined: November 4th, 2016, 12:04 pm
- Has thanked: 3339 times
- Been thanked: 1054 times
Re: NSandI 3yr Green Bond at 0.65%
mc2fool wrote:didds wrote:Im probably missing something but MSM suggests there are plenty of other institutions offering a 3 year lock in for substantially higher returns - 1.92% with Al Rayan for example.
And there are even better normal accounts (not Sharia) offering higher rates for a 1 year fix.
MSM is only showing 1.3% for 1 year fixed?
(Im still missing something clearly - LOL)
-
- Lemon Half
- Posts: 8014
- Joined: November 4th, 2016, 11:24 am
- Has thanked: 7 times
- Been thanked: 3087 times
Re: NSandI 3yr Green Bond at 0.65%
didds wrote:mc2fool wrote:didds wrote:Im probably missing something but MSM suggests there are plenty of other institutions offering a 3 year lock in for substantially higher returns - 1.92% with Al Rayan for example.
And there are even better normal accounts (not Sharia) offering higher rates for a 1 year fix.
MSM is only showing 1.3% for 1 year fixed?
(Im still missing something clearly - LOL)
Dunno what MSM is but I long ago gave up on anything other than MSE, which always seems to be the most up to date.
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/#fixedsavings
Return to “Bank Accounts Savings & ISAs”
Who is online
Users browsing this forum: No registered users and 4 guests