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AIBU?

To ask how best to invest £25k short term?

31 replies

Pottedpalm · 12/01/2024 23:17

We have £25k which will be needed in a year or two. Looking for advice on how best to invest it.

OP posts:
RandomButtons · 12/01/2024 23:36

High interest rate isa or limited access account.

Illdoittommorow · 12/01/2024 23:38

20k in isa, tax free, 5k premium bonds

ExtremelyJoyous · 12/01/2024 23:38

If you don’t need it then lock it away for a fixed term, lots offering 5% (or slightly more!) pa.

Pottedpalm · 13/01/2024 00:05

Hadn’t thought of premium bonds. Thank you. Will research.

OP posts:
TurkeyTwizlers · 13/01/2024 00:07

premium bonds are a bit hit and miss, but they give the opportunity to earn big money with zero risk.

OliveToboogie · 13/01/2024 00:08

I have same amount in Fixed rate savings account. Interest is 5.2% so gaining about £110 a month interest.

Ap24 · 13/01/2024 00:29

Illdoittommorow · 12/01/2024 23:38

20k in isa, tax free, 5k premium bonds

I agree with this. You can get pretty good rates on cash ISAs at the moment and you could always move the 5k from premium bonds and into a new cash ISA after the start of April.

Ambi · 13/01/2024 00:32

@OliveToboogie is it in a cash isa? Otherwise you'd have to pay tax on £300 or £800 interest depending on your income tax rate.

WhatIsHeThinking · 13/01/2024 00:43

Try MoneyFarm. First year is fee free. I’ve had 7% growth since May 2023.

CKL987 · 13/01/2024 01:17

Fixed term cash ISA. This is too short a period to consider higher risk investments than cash.

trussedchicken · 13/01/2024 01:50

One year fixed rate bond or ISA. If you can lock it away for a year without needing to touch it, that would be a good bet. If taking the ISA route, do it soon and get £20k in, then the other £5k in April. Take a look at high street banks and building societies. Nationwide were offering decent rates recently. Shop around.

CarterBeatsTheDevil · 13/01/2024 01:59

I second premium bonds!

Tilllly · 13/01/2024 03:18

CarterBeatsTheDevil · 13/01/2024 01:59

I second premium bonds!

How do you go about getting premium bonds?

2mummies1baby · 13/01/2024 04:52

Tilllly · 13/01/2024 03:18

How do you go about getting premium bonds?

Try googling premium bonds?

2mummies1baby · 13/01/2024 04:53

Another vote for premium bonds here- we have had such a good return on ours. And you can get the money out very easily if you unexpectedly need it.

LindorDoubleChoc · 13/01/2024 05:42

Yabu.

Zanatdy · 13/01/2024 05:48

Some great rates right now. I get 4% in my HSBC savings, you get a bonus for not taking any money out too. Plus I’ve got an ISA. I’ll be paying tax on the interest this year - does anyone know how this works? Do I need to declare it or will my tax code be amended.

CarterBeatsTheDevil · 13/01/2024 08:03

I will say, though, my IFA suggested premium bonds to me because I didn't want to lock the money I had away, and at the time interest rates were rock bottom for savings accounts. So he suggested I see if I could beat what I'd get in a savings account. Which I did. But I don't know if I'd have beaten it with the 4% rates you can get now!

Babyenroute · 13/01/2024 08:05

I wouldn't anything in an isa which you would want to take out in a year or two. I would just put it in an instant access savings account like Chase at 4.1%

TinySaltLick · 13/01/2024 08:08

Bitcoin - you could double your money in a few months!

Or perhaps lose 80pc of it overnight

Are you willing to risk it going down or just up

Cotswoldbee · 13/01/2024 08:16

Much as I love PB's (both OH and I are maxed out 😁), if that lump sum is your only savings and you have a specific need for it I would put it into a decent savings account to get guaranteed growth (there are some half decent rates available at the moment).

PB's are great if you aren't worried about guaranteed growth but instead want the money to be safe, happy to receive irregular prizes and dream of winning the big one (also tax free). 👍
On the other hand, if you want it to be safe but also earn a guaranteed rate of interest, a normal savings account/bond is best (NS&I do these as well).

Tilllly · 13/01/2024 08:28

CarterBeatsTheDevil · 13/01/2024 08:02

@Tilllly Here's Martin Lewis on premium bonds: https://www.moneysavingexpert.com/savings/premium-bonds/

And here's where you go about getting some if you decide you'd like to: https://www.nsandi.com/products/premium-bonds

Thanks, that's really useful

Luckydog7 · 13/01/2024 08:34

I have a tandem account which is 5% interest. Making about £70-80 a month on interest from about 13k and can top up or take out as much as I want/need. We could overpay out mortgage but because of the fixed rate we actually save more money keeping it in saving then on the house!!

ExtremelyJoyous · 13/01/2024 08:39

Ambi · 13/01/2024 00:32

@OliveToboogie is it in a cash isa? Otherwise you'd have to pay tax on £300 or £800 interest depending on your income tax rate.

Isn’t the savings allowance £1,000 for a basic rate taxpayer and £500 for higher rate?

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