We had a 3 year fixed term deposit. It's just matured, and know we're not sure what to do with the money.
Obviously there are 101 things we could actually do with it, it's not a huge sum and we're not rich, but we're not sure what would be the most sensible thing to do with it.
Should we put it back in a bond? Maybe a 1 year one? Or should we split it and put it in our ISAs? Which have a worse interest rate. Should we pay off a chunk of the mortgage (it's only just started)? We probably can't pay a lump sum, but we have the option to change our repayments, so we could pay double for a while. I'm worried that we might need a lump sum one day though.
Any advice would be very gratefully received, thank you!
You could put it in another bond. Pity actually, because National Savings up until a few weeks ago had a nice 5 year inflation+ bond on offer, and withdrew it because it was so popular! If you go to www.thisismoney.co.uk they have league tables of the best bonds and other savings options. You could take out a better-paying ISA with the money. Some are offering 3%+ if you're happy with various conditions. If you have debts costing you more than 3% think about paying those off. And if your mortgage is costing more than 3% and you can pay something off without a penalty, that's worth considering....
If you wanted to go a little riskier you could think about unit trusts or a Stocks and Shares ISA. The market is very low at the moment and if you choose carefully it could pay off long-term.
I like to keep something 'instant access' just in case there's an emergency. Having once had a central heating boiler condemned and having to find £2k to replace it, I don't like everything being tied up in property or long-term investments. HTH
We have no other debts thankfully (well apart from my student loan, but all the advice says don't bother paying it off).
I'm hoping we'll be able to know a few months of it in the end by increasing the repayments in the short term. Our broker told us that even if we could pay off an extra £10-20 per month it would be worth it, so hopefully it'll make a little dent at least.