Premium bonds? Or other suggestions?

[Lilmisssunshine7]

We have around £20,000 that we will hopefully use as a deposit on a buy to let in approx 6-12 months time.
In the meantime we were thinking of putting the money into premium bonds as it's risk free, we will hopefully win a bit with that amount and it's easy to get the £ back quickly when we need it.
Anyone any experience with bonds, or other suggestions welcome! I'm crap with money! Thanks

[holeinmyheart]

I have 20,000 in Zopa which is a Peer to Peer lending consortium. I have found the whole experience to be easy and straight forward. They are paying me over 4% on my money which I leave in. I can get it out any time. They lend your money out and spread it around many borrowers. They have a insurance scheme so that you will not lose money. It was recommended in Guardian Money one Sat.
I have a lot of money arriving soon and I am splitting it and putting into Zopa between my husband and I. If you buy Premium Bonds you will in effect lose money because of inflation. Great if you win though. V
I keep £5000 in Lloyds Bank. They are Paying 5% on balances of £5000 and you can have one account and so can your husband. You need to pay in 1500 a month and have two standing orders going out. I just shuffle the 1500 between accounts. It goes in and out of the accounts every month. I do it to get the interest and it is instant access.
Current accounts, where you have instant access to your money generally pay no interest, so money left I those accounts for a long time will lose money because of inflation. Santander are paying interest on their current account but you have to pay them a monthly fee.
If you have no ISA s you could consider them as they are tax free. However if you don't pay tax then any money that you have aught to be in your name as you have a tax allowance, given to you before you start paying tax.
I have just sold a buy to let and I am very experienced regarding money. I have stocks and shares Isa's but you can lose money with them.
I think Zopa is your best bet.

[Lilmisssunshine7]

Thanks for replying - Zopa sounds interesting. I will definitely take a look before we make any decisions. We do have an isa, but I know we are not using it properly :-/ The big chunk of money is just sat in a current account until we make some decision!

[holeinmyheart]

Current accounts are the worse place for your money as they pay zilch interest. My stupid Father kept a vast amount in his current account for years. He used to say that his personal bank Manager used to meet him at the door of the bank and offer him a cup of tea and make a big fuss of him.
It used to make me so mad that he didn't use the money more wisely. No wonder they loved him, they were using his money to make money for them, not him.
No one in the financial world is on your side. Remember!

[specialsubject]

that is simply not true, hole. There are many current accounts which pay interest at the moment, and far better interest than you can get on savings accounts.

The accounts all have fairly low maxima. You need to do a certain amount of setting up of standing orders and some direct debits, as all the interest payments are dependent on money going into the account. But it doesn't need to be salary, the same money can move around between accounts. As savers are dirt and have been for five years, these shenangians are the only way to get interest.

best deals at the moment:

TSB Classic Plus, 5% on 2k, pay in £600 per month
the above mentioned Club Lloyds - needs two direct debits and £1500 in a month.
Nationwide: 5% on 2.5k but only for a year
Santander 123: 3% on £3k to £20k, £2 a month fee, needs a standing order and two direct debits. Pays cashback on bills so use it for those and you'll easily cancel out the fee.
Tesco current: 3% on £3k, needs £600 in a month. The associated saver accounts can be used to set up direct debits without actually paying anything should you not have enough.

[holeinmyheart]

specialsubject did you read my post where I said that I was shuffling my money between current accounts ?
As I said there is no Bank offering decent interest on a current account unless you pay money in every month or pay them a monthly fee.
I mentioned Santandar and Lloyds.
Lloyds used to let me have lots of Current accounts ( I had four) paying 5% on balances of £5000 and I shuffled the money between them. They put a stop to that earlier this year. Nationwide will reduce its 5 % on its Flexi Direct account current account later this month. I have a Flexi direct account that I shall be closing at the end of the month.
I thought as the post was a self confessed novice, that shuffling money between accounts and banks might be too much for her.
I think she should buy a buy a buy-to-let now. November is a poor month for sellers and they may get a bargain.

[specialsubject]

no, I only read the post where you said 'current accounts pay zilch interest.'

I'm playing the same games as you and it is a real pain. But it is the only way to get interest.

[Cindy34]

Time period is short, so you want to find accounts that calculate interest daily and pay it monthly.

Premium bonds does not pay out anything for at least the first month, think two months. You may get nothing, you may get 25, 50? You just don't know, so it is a gamble.

Current accounts will have conditions you must meet, such as paying in a certain amount each month. This can be done by setting up standing order... I have one that pays money into another account, then moves it back again 3 days later.