Bond account question

Hi everyone,

I have had no luck phoning bank of scotland about their fixed rate bond account. My question was is the interest treated as income? As I have seen a few things saying some bond accounts are tax exempt?

If the interest is not is it just treated as capital gains tax? And as in a lower rate tax payer I probably won’t be over the limit?

Doni need to I from hmrc or do you only need to do that if you go over the limit? I know they already know everything anyway as banks have a duty to tell.

Thanks, just asking as my heads a little fried right now with moving to a isa and all that jazz.

Any help would be appreciated thanks

I dont know the answer , sorry.

But I am intersted in what your thoughts are in opening a bond account? Previously you said you couldn’t pay £20k a year into your ISA , like most people including me, so what motivates you to invest in bonds rather than just your ISA?

I dont understand, not criticism you understand :slightly_smiling_face:

From the Bank of Scotland website on fixed rate bonds:

So not tax free - any interest earned outside of ISAs or SIPPs is taxable, subject to allowances.

Here’s the latest info on these allowances: Tax on savings interest: How much tax you pay - GOV.UK (

If you already submit a self-assessment tax return each year, you would include this interest. If you’re not employed, do not get a pension or do not complete self assessment, your bank will tell HMRC how much interest you received at the end of the year and HMRC will tell you if you need to pay tax and how to pay it.

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Despite the fancy title it’s just a savings account - so tax will be due on any interest over the tax-free limit.

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Well my thinking is that with the rates about to rise am hoping for as close to 6% as possible I get an extra 0.05% as well for holding an account for 40ndays.

This money isn’t stocks money it’s my safe money/rainy day kinda stuff so that’s the reason for opening and Tbh that’s a decent rate vs the current rates of our current efts

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The tax free limit is £1,000 for persons with an taxable income of £17,570 or greater.
If your taxable income is below £17,570 there is an upto £5,000 starter savings tax allowance.
I believe you can use both (check)
If your taxable income is £12,570 then you have the full £5,000 plus £1,000 (need to check the latter).
If your taxable income is above £12,570 you loose an equivalent amount of your starter savings tax allowance.
Interest payments only
Included are
Savings accounts
Investment trust Shares where Dividends are paid as streamed interest
Peer to peers.
And supposedly oeics where dividends are paid as streamed interest (can’t see how that’s possible)

There an investment trust debt-loans & bonds sector

Might be of interest


If you need to keep it fluid perhpas it makes sense for you.

Definitely can do better than 6% in the market…but if its not investment money as such fair enough.

Hope you find the slush fund product you need :+1:

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So I guess I have £1000 to play with so as long as I put enough in to stay under this limit I should be OK?

So only if I go over the limit I need to do a self assement?

Yes from what I have read and listened to you should always have rainy day funds in your account that is the bank even though I know you can do better in the market but what this is such vicing is risk reduction as the markets are unpredictable, so at least you know this money should be safe.

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I am using a peer to peer for a small amount of money.
Interest 10%to10.5%
Property development loans.
Been around a while.
Did particularly well during COVID.
Loans can be as long as 28 months.
I am just going for 4 to 6 months loans.
These are often finally phases of house building.
As in phase 9 of 9 etc.
Long loans are best if you want to lock in present interest rates.
Short if you are like me and think house prices may have a meaning fall.
Note LTV are around 70% or less.
Interest paid at end.
Builders have a habit of underestimating how long it will take.
If not got a good excuse then an extra 2% is added.

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Not clear even then that you need to - better to check yourself if you need to do a self assessment in that event: Check if you need to send a Self Assessment tax return - GOV.UK (

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Santander has just opened a 5.2% instant access account.
Limited offer.
Tandem is 5% instant access.

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I worked in construction for years most of the time it’s actully the architect who got it wrong thw the builders nerd to try sort the mess but yes it all depends on price work or paid by the hour :slight_smile:

Yes my mum just done thst one bur bos beats it for me anyways as I get a better deal for being a customer.

Santander have also just closed it to new applicants yesterday

I know I said it was a limited offer.
Useful though for the moment that is until next week when someone offers a better one!

LendInvest Corp bond paying 11.5% :sunglasses:
Better than any saving account.

:face_with_peeking_eye: if you like to take a bit more risk

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Sonic please be mindful of the information you are sharing on the community you are either ramping stocks or sharing bonds that should be outside of peoples risk profile that can’t be held tax efficiently.

That’s a mad amount