Banking - Bonds investment. Anyone have such a thing?

[James07]

Okay so eventually once i reach £500 i want to put it into a bond for a year, get some money on my money whilst saving it and been unable to withdraw it so this is the best option.

Before anyone says anything i know i work in a bank i just need some advice from someone outside work, i dont want anyone at work knowing my financial situation hense not getting a bank account with Abbey National.

Now ive looked this up a little and the one i want is just short of 7% a month on anything you have in the bond. so 7% of £500 works out at around £35, over 12 months is £420, now that cannot be right can it? I cannot earn £420 off £500... that surely isnt possible, is it? Everyone would be doing it if that was the case.

Does anyone have one of these, can you clear it up for me please.

Thanks,

James.

 

[BurningHorizons]

7% a year maybe, not a month.

 

[BIGWEB]

7% is the yearly rate

 

[dowie]

What do you do in the bank btw????

 

[PardonTheWait]

Now ive looked this up a little and the one i want is just short of 7% a month on anything you have in the bond. so 7% of £500 works out at around £35, over 12 months is £420, now that cannot be right can it? I cannot earn £420 off £500... that surely isnt possible, is it? Everyone would be doing it if that was the case.

HOW CAN YOU POSSIBLY WORK IN A BANK?

 

[Posty]

wouldn't it be 7% on £100

 

[sven256]

His job Banking Advisor @ Abbey National

we all now know where not to bank.

 

[[TR]SweetSpotOz]

.

 

[Mulder]

Unbelievable, how can this guy work in a bank!?

 

[GarethDW]

I'd recommend having a read of the FSA's guide to bonds, as it appears you've not yet got your head around how they work...

http://www.moneymadeclear.fsa.gov.uk/products/investments/types/asset_classes/bonds.html

 

[willd58]

Ahahahaha, this has got to be a joke?

 

[Sacred]

Lol. Someone contribute and stop getting at this poor guy for working in a bank and asking such a question.

 

[Vindaloo2]

Perhaps he used to work for Fairpak xmas hamper club

 

[doofer]

Actually works in a Bank, my god, no wonder all the jobs are going to India Thanks for the laugh James07 I really needed that on a dark, cold, wet and windy morning.

 

[ErNciLator]

loool? no wai you work in a bank

also

wouldn't it be 7% on £100

LOOOL?



Yeah, 7% AER you're lucky, maybe 5-6% fixed.

99.999 rates expressed as year on year basis - (1+(YEARLYRATE))^(1/12) should give you monthly rate or there abouts.

 

[Majago]

Yeah, 7% AER you're lucky, maybe 5-6% fixed.

It's still possible to get up to 6.75% AER on a 1yr fixed rate bond. Would agree it's not common though.

 

[Azza]

Great thread.


I would laugh even more if he is doing this for a client.

 

[meghatronic]

HOW CAN YOU POSSIBLY WORK IN A BANK?

 

[Vanilla]

Guys, it's OK, he doesn't technically work in a 'bank' - he looks after pension funds.

 

[Mad old tory]

Sheesh. as already mentioned, it will be a yearly rate but the interest will be calculated and paid monthly. I reckon with the tax you'll be paying on the interest (assuming bond interest isn't tax free), you'd still be better getting an isa at 6% if you can still find one