chump

I've got £6000 to invest but I can't afford to risk it in stocks. What is the best way to invest it with the maximum return but where I can get hold of the funds with 6 months notice or more. I'm am a complete n00b when it comes to finances....so any advice would be appreciated.....

Cheers
Chump

Manda_po

Have you got a mortgage? If so, why not offset it against that?

chump

no this is savings towards a mortgage

mattykimbo

what about a 1 year fixed rate bond, interest rates are on the up on these

pslewis

Personally, I would plonk it into Premium Bonds - when you win the £1million you won't have any need of a mortgage!

Or, be boring, and stick it away at 4.5% secure in a bank of some sort!

Pete

Dave uk blue mica

i'd put a grand on premium bonds and the other 5 on a ISA, ISA's are doing very well at the moment but be prepared to leave the money in there for at least 5 years or you'll lose more than you've put in, i've made a absolute fortune from having one of these, would highly recommend one.

thecirsch

AFAICR you can only place 3k into a cash ISA. So why don't you stick half in the ISA and half in Premium bonds. That way your money is earning a bit of interest and your having a bit of a punt at the same time

Petem95

Whats the interest rate on premium bonds?

I would've suggested ING direct, 4.85% AER and its instant access. Thats where most of my money goes these days (well and cash ISA)

ProperCharlie

you can't directly compare PB interest rate to something like ING, as PB income isn't taxed, but the interest from a bank will be unless you use an ISA wrapper.

Robert Rosario

Also, your returns from Premium Bonds are in no way guaranteed. You may be lucky and be a winner, but lots of people have bought these in last few years as an alternative to shares, so the odds are now much less than they were a few years ago.

Personally, I would go for Cash ISA (Max £3K) and the rest in ING or something similar.

If you parents/other half are non-tax payers, considering investing in their name, as there will be not tax on the interest

Old_Fart

unless you've got £30k to putinto Premium bonds they just aren't a realistic short term investment...the expected returns are just too low. Of course you *could* get lucky, but more than likely you will realise a crappy return over 6 months....especially as the first 1 to 2 months are 'dead'
C

gsm1

ISA is a good idea but it's only 3k max cash. Also check the rate you're getting for the ISA, if it's a poor rate it doesn't matter squat that you're not paying tax on the interest.
ING savings are good.

I'd only go for premium bonds if you've got at least £10k and it's money you don't really need. I don't know what the situation with PBs are at the moment but the prizes do not increase relative to the amount of premium bond holders.

blair

I always thought that the prize fund of the premium bonds was determined by a nominal rate of interest (usually fairly low) on the total amount invested in premium bonds.

I think the total payout does increase but there are a fixed number of big prizes - so you are less likely to win the £1m but just as likely to pick up a £50 prize

Robert Rosario

Premium bonds are suitable for some, but at best they are a "punt".

Even if you scoop a couple of the £50 prizes, work out what you have really "earned" on your money and it will be low.

But, you have always got the (very slim) possibility of a big win, and your original investment will not go down in value, although if you hold them for the long term, inflation will eat into it.

TelBoy

ISA, if you haven't used your entitlement.

Davyboy, what do you reckon?

gsm1

From what I was led to believe the prizes only increase once the number of PBs bought hit a certain threshold.

blair

Looking at the NSI website, its a bit of a mix of both - the total prize fund is determined by the nominal interest rate but the number of prizes is set so that there is one prize for every 24,000 bond units.

They will flex the numbers of middle band prize winners to ensure they have enough £50 winners to meet the ratio.

So for premium bonds you have a 1 in 24,000 chance of winning a prize (which can vary between £50 and £1,000,000). I'd definitely stick £3000 into an ISA savings account.

Not sure about best buys for savings accounts - Cahoot is paying 5.5% at the moment

ProperCharlie

why is it that cahoot accounts pay *less* interest the more money you have in there? most accounts work the otehr way around. not that i have enough money in mine to have to worry about that...

Wish

iTrader: (2)

Dont do the premium Bond thing.... Ive got the full a mount allowed and win very little from it. I also have the full amount for my son.... He hasnt won a thing since FEB !!!!!



But saying all of the above the million pound winner this month had a holding of just £17 !!!!!!!!

Some people, have sooooo much luck.



I would stick it all in to ING