Bonds - which time period

[NickNick]

Hi all,

I know there has been a fair amount of talk on CDs, etc but can't find the relevant answers in search....

As well as some money in funds, I currently have some money in a Building Society account - I like to keep some "emergency money" instantly accessible, but at the moment there is more than sufficient in there.

I have found some 3/6/9 months bonds that offer a better rate than my building society (6.3, 6.35, 6.4% (pa) respectively compared to 5.5%).

Is it worthwhile putting some money into these?
If so, should I put it all into one time band (which?) or spread it over them all? (Laddering it?) There are also longer periods (3yr/5.5 yr) but would prefer to keep this money more accessible - it is v unlikely that I will need this in the near future, but much more likely that I'll want it in a few years.

I also assume that its best to have the interest kept in the bond rather than having that in a different account?

I am 21, UK based btw.

Thanks a lot
Nick

[ItalianFX]

It really depends on what you plan to do with those bonds. Do you plan on holding for the entire term? If so, then your next question is, when do you need the money? If you plan on holding for the entire term and don't need the money, then you're better off going with the highest yield. Once you lock in the yield, it doesn't matter what the bond does as you'll be paid back your principal plus interest. This is all assuming that there is a small chance of default.