£12K to save/invest

[suitsyousir]

Hi.

I have recently come into a £12K lump sum from an inheritance that was stipulated to be invested. I am completely new to this as I have never had this kind of money before.

Im quite risk averse and do not need to access the money straight away, but would be good to use in case of emergency (ie redundancy etc).

I cant decide between putting it all in a fixed rate isa, something like zopa or some into premuim bonds and some into savings/isa.

Can anyone make any recommendations please?

I would absolutely recommend Zopa. I think they are lovely to deal with and there are safeguards in place. There is hardly anywhere else to put your money without risk and still get a decent return.
Although in the New Year the financial papers are reporting a rise in interest rates.
Try reading the Saturday Guardian's Money section.

I have Stocks and Shares Isa's Jupiter and M&G, ( medium risk products) I bought them myself after a lot of reading.

There is a big difference between Zopa and your other options. All except Zopa have a govt guarantee that you will not lose your money and can access it at any time. However the interest rate is lower. Zopa give a higher return, but no guarantee on getting your money back and has a 1% charge for early access and does not guarantee you can get your money early.

Thanks for your replies. I have been looking again this morning and decided that I want it in something where there is no risk of losing it.

Im currently looking at a fixed term isa (£10, 000 for 2 years at 1.95% is the best I can find) and £2,000 in premium bonds.

Assuming the interest rates go up after two years I can then hopefully move the 10k to something a bit more profitable with a small chance of winning some with the bonds. Boring but safe I think.

Assuming you have no ISA currently and that the terms of the inheritance permit you to use a standard savings account, the have a look at Regular Saver ISAs which some banks offer. They can give a higher rate in year 1 but have max monthly amount you put it, such as £1250 a month.

You would need to compare the interest amount on putting all into an account, or putting it in a regular saver ISA monthly. It may not be much different but it might be.

Retail Bonds might be an option if you are prepared to take some risk. JohnLewis may have a bond issue again at some point. Retail bonds can give up to 6% return but you do risk losing it all if the company goes bust.

a good idea is to have 3-6 months net income as savings easily available (your choices work). More than this should probably be invested in more risky/better return assets.

remember you can get higher rates from current accounts - 4% at Club Lloyds, 5% at Nationwide and TSB. You'll need to split the money between accounts and set up standing orders to meet the criteria for interest.

taxable of course, unlike an ISA.

Thank you all for the replies. ive had a chat with the will executor and its most likely going into a fixed term isa for 2 years, in the hope that interest rates go up and I can then move it elsewhere. it cant go anywhere there is a risk of losing it and im not disciplined enough to add bits and pieces between savings accounts that offer a higher interest rate on a smaller amount of money. Thanks again tho, appreciate the ideas.

fair enough - although do work out what the comparative income will be from the ISA as opposed to the current accounts. If you have a partner you can house it all in 2 Club Lloyds and 2 TSB accounts and it will take you a couple of hours to set up. If it is just you, you will need more accounts.

I recognise that these accounts are taxable and obviously I don't know your tax position.

current best 2 year ISA: Post office, 1.95%. You'll earn £234 a year. Don't spend it all at once.

thanks. I was looking at the post office one. Just hoping that interest rates go up after the two years. ill definitely be paying tax on it otherwise.

A Santander 123 current account gives about 3% on up to £30k as I recall....

£20k. It is of course taxable, and needs a certain amount paid in, and two direct debits. Use it for household bills and put in some money via a standing order if no wages, job done.

That's right special. We still find it good though, especially as is instant access and our ISAs are maxed out. We have their 123 credit card too which earns us a fair bit in cashback.