I have a small amount of money I need to look after - where do I start?(9 Posts)
My knowlegde of money matters is dismal. DH and I have £15k that we we want to set aside for us to use towards the purchase of a house in 5 or so years time. We do not earn enough to buy now.
I cannot lose that money because it is all that we have, so I cannot take any risks at all with it. But: I don't know where to invest it. I am a complete novice at this.
Can anyone give me some advice as to how to go about looking after this money? Thanks.
The best advice for financial advice is to ask a professional but as a lay person in your shoes I would get a national savings indexed linked bond. Well, I think I would get two of them using half the money in each, one in my name and one in DH's name so if we needed to access in an emergency we have the option of withdrawing half rather than having to get it all.
Just bumping this for you as I'm in a similar position. Mine is currently in Premium Bonds, and I'm trying to add to it when we have any spare. I find them useful because it's instant access should I have an emergency need for the money, but not so instant that I can just borrow the odd £100. However, I'm aware that I could probably get more interest elsewhere, but a bit scared of getting it wrong!
Not a specialist, but I was coming on to recommend the same as Oddboots. I read the financial sections of the paper, and they're all recommending this. I thin you can put £15k each in, and you can withdraw before the five years is up.
If you get Saturday's Guardian, there's a best buy table in the money section.
If you do go for the savings certificate, you'll probably have to do it soon before it's withdrawn.
I was going to say Premium Bonds or index-linked savings certs (they've only just been reintroduced so hopefully won't go off sale in the too near future) too. There's also a couple of index-linked cash ISAs available see here. All the above offer tax-free returns, which is definitely worth it if you pay tax (and more worth it the more tax you pay ).
Seems my knowleDGe of spelling is also dismal.
Thanks, everyone for your advice. I will have a look at the links provided.
Don't worry, Numberfour, I had to read your OP again twice before I even noticed.
Jogonjill the indicative interest rate they use to calculate the prize fund on Premium Bonds is 1.5%. So it's not great but I can't think of an instant access savings account that would give you the chance of an unexpected £1m!
It's not a good long-term solution as inflation will hit it (ask anyone with £10 of Premium Bonds bought in 1962!) but if it's only for a couple of years I can't see much wrong with it. For actual hole-in-the-wall type instant access for the odd £100 the rates on offer are so pitiful (0.1% on my savings account so I'm hardly one to preach - though in my defence the bank suckered me into it and I've been too feckless to remedy the situation) that you'd be as well to keep it in a drawer.
LadyWellian, at the moment it is in my current account and I am almost inert, not knowing how to deal with it!
It is the proceeds of sale of a flat I owned abroad. And there it sits.
I will talk to DH this weekend when we have a moment. Some of the money needs to be spent on car services and tax bills etc.
Also was going to say the National Savings & Investment index linked thing. It is paying 0.5% tax free above inflation. DH & I have both taken one out for 10k each.
We also had to find a shorter term home for savings last summer, and back then, we found the Sainsburys and Alliance & Leicester had really good rates (2.5% I think, versus normal bank saving accounts which were only about 0.1%) for the first 12 months, with instant access, and a minimum balance of 1 pound. That seemed the best risk-free option for one year or less, but I think the rates then dropped sharply after you had had the account for 12 months.
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