Well, now that we are able to convert an Isa into a Nisa, I have read that under new rules we can hold corporate bonds which do not have to be at least 5 years to maturity.

So perhaps some discussion on bonds worth buying that fit this profile might be worth opening up on this forum


  • I had a look into this thinking of buying short dated bonds as an alternative to holding cash in my existing cash ISAs. I also own a number of retail bonds bought at issue.

    For example I own the Lloyds 5.5% maturing in 2 years 2 months. Selftrade are quoting me 1.0774 to buy some more so lets say I buy another £2500 factoring in £12.50 commission gives me an effective price of 1.0824. Plugging this into a yield to maturity calculator gives a yield of 1.71% if I hold for next 2 years 2 months (if you buy a larger quantity the yield is slightly higher as the commission makes less of an impact)

    Now I can get 1.5% in a cash ISA which gives me easier access to my money and the value will not fluctuate/fall if interest rates rise (my interest could actually go up or I could switch into bonds on any price falls)

    There are higher yielding bonds, but for me I want my short term money to be as safe and flexible as possible so for now will stick with cash.

    The only thing I've bought recently are index linked corporate bonds just in case inflation/rates rise but that is a debate for another thread . . .
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