Best low/no risk return for £100k for one year? Hit me with your recommendations!

[AGreatBigPonk]

Where would you recommend investing £100k for a year? The money is to be used to pay down my mortgage but if I did that straight away would have to pay some heavy early repayment charges. So I'm planning to pay off the max overpayment for this year and when my fixed term comes to an end next year to bring down the balance with the rest. BUT...what do I do with it in the interim with rates as they are? Not looking to take any risks with it so stockmarket is out. Any thoughts?

One year bond? Check comparison tables for best interest rates. For easy access 8 think Tesco have a whopping 1.3% easy access account.

I'd stick 15k premium bonds myself, you never know and 85k into the highest possible account as 85k is protected.
MSE will have latest best account tables to look at.

You could split it up into various current accounts as they tend to pay higher interest and you may get a switch bonus for setting up a couple of direct debits which could be to other saving accounts. A faff but possibly worth it.

Slim pickings isn't it!

There’s nothing much out there, just a few measly 2% bonds and premium bonds. You say you want to pay down your mortgage - how long is your whole term including the fixed rate? If you’ve got many years to go you could pay off the maximum lump sum as planned then reduce the mortgage term to the minimum possible, say 2 or 3 years, and pay a huge chunk of mortgage every month until your fixed rate ends. Then increase the term again.

That’s an interesting idea Emily. Is it common to be able to change the term even when you are in the fixed term? I’m 4 years into a 5 year fixed on a 25 year mortgage so plenty time to go.

I don't know what your income status is like. But I would buy another property on a buy to let, you would get the rental income and equity from the property.---- A life long investment

I agree with trying to reduce the term of your mortgage. We did that and the relief of knowing it'll be gone in 5 years is enormous. No matter what happens in the market we'll always have a roof over our heads, even if both of us got made redundant (unlikely). You'll also pay less interest by paying it off fast and in large amounts than by slow and low.

@AGreatBigPonk - yes it’s common, I can even change my mortgage term online. So say your mortgage is £200k over 25 years costing approx £950 a month. If you reduce the term to 3 years you would be able to throw £8,500 a month at it. You’d have to check that you could do it without penalty.

So if you buy £30k premium bonds, pay your mortgage lump sum and then reduce the mortgage term it’s not going to earn a fortune but it’s doing something useful with the money.

@Emily7708 - I'll definitely look into that. As long as the bank doesn't treat it as an overpayment (as still in the fixed rate period), I might well go down this route. Will check with them. Thanks!