How can I safely invest 11k?

[guesswhosbac]

I'm hoping to buy my first home in the next 3-4 years and I currently have 11k saved towards the deposit, I think I will need around 20k in total. However, I am worried that it is just basically sitting in a low interest savings account of 0.1% and therefore my money is effectively depreciating with the rate of inflation and I'll constantly be playing catch up and will need to keep saving more and more to keep up. I've noticed house prices drastically going up in my area as well. Is there any way I can safely invest this money as I can't really afford to lose any of it ? I'm not looking for mega returns, just more than what I'm getting at the moment.

Have you looked at premium bonds? No guarantee of a return but I have around £15k invested and win at least £25 most months.

What about a stocks and shares ISA? I have one with nutmeg and you can select a risk level. I would go with a low one. I make good returns but obviously it's still risky.

It's brutal for savers out there.

Lisa you can use it towards deposit (see Martin Lewis) you get top up on money from government cash one or investment (if you need it in 3-4 years cash isa would be safer.

I don't think you can put it all in a LISA though.

If you don't mind me asking bumble, what kind of returns do you get?

Sorry forgot you can put 4K in a LISA per year but also hold additional Isa up to total of 20k this year as combination of products.

You should not put it in stocks and shares if you need it in the next 3-4 years IMO. Just find the best interest rate you can for a savings account or savings bond and consider using a LISA if you're eligible.

Premium bonds are a great investment. They’re risk free up to 100k and you don’t lose the premium.

4k in a Lifetime ISA now. 4k in Lifetime ISA on 6th April 2021. 4k in Lifetime ISA on 6th April 2022. If you then were to buy in Summer 2022 you would have £15k in the Lifetime ISA due to the Government topup, plus any growth on the account - there may not be much as with the timescale you have you want to use a Cash LISA product.
Keep adding to the LISA if you will be buying in 2023 or 2024.

So use £4k now, you have £11k, so what to do with the remaining £7k.
I would put it in Premium Bonds... you never know what you might win. Then £4k will be used on 6th April 2021, so you have £3k left.

Is this £11k in in addition to your 6 month of expenses emergency fund?

I still live at home so I don't really need a 6 month emergency fund as such but I will have 1k left over in a Hsbc savings account for any unexpected expenses. I'm not keen on locking my money away for a period of time as I'm worried I may need it for something, although I'm not sure what I would need it for.

I think I may go with the premium bonds but I'm going to look at the lifetime isa first.

The LISA is a no-brainer in your situation. Follow the timeline of the previous poster.

No investment is 100

Posted too soon

No investment is 100% safe, don't believe anyone who tells you otherwise

To be safe you need to be using some kind of saving that is backed by the government guarantee

Nanny, how do you come to the calculation of 15k? I've calculated it would be 14k, it's still good but I'm just wondering how you got to that figure? I've just looked at the lifetime ISA and I agree it's probably the way to go. Thanks.

There are some current accounts offering more than O.1%.
I have a good chunk of my savings in the Santander 123 account- currently 0.5%, plus 1% on all direct debits for utilites etc.
Only up to 20K though.

If it is to buy a house go with a LISA.

The gvt gives you £1k for every £4K you save, as long as you spend it on a house or your pension . If you take it out and don’t spend it on those you lose the Gvt top up but keep the basic interest rate. Put in the full amount for this year, then another full amount in the new financial year and so on.

Look at Lifetime ISA on MSE.

Oh yes forget that I realise now. I've just opened a lifetime isa with My Nottingham. Thank you for your advice.

At the very least, you can move your savings away from an account that pays more than 0.1%. You can get 0.7% in instant access, so there's no reason not to move your money to a better paying account, once you've put enough in your LISA to take advantage of the government top up.

On £11-20k PBs are hit and miss - its down to luck whether your prizes will suitably offset interest available from other accounts - you might, but also might not.

Yes, savings is going to be difficult over the next few years. The flipside of that is when you do get your mortgage, its likely to be very low interest.

speakout The main Santander account is unlikely to be suitable for the OP because of the £5 fee and she lives at home so very few bills to offset this.

£4k to LISA gets £1k topup. Do that three times and you have at least £15k. I am assuming between now and the 3rd LISA payment you will be able to save £1k, so you put in £12k in total, not £11k.

Moving always costs more than you think so have a big cash buffer for when you actually move, in addition to the LISA which goes towards deposit.

@guesswhosbac I am currently running at about 6.5% but yes, it's better to invest in stocks and shares longer term but I do do it for shorter periods.

I've just looked up the S&P index.

It was about 1400 in 2000 and about 850 in 2003.

Between mid 2007 and mid 2009 it fell by 50%

For the last 10 years it looks like it's done pretty well, but who knows how safe its going to be during the next few years as we all pay for the fallout from COVID, it seems unlikely to 'almost certainly just go up' in the next 3-4 years.

Now £11-20k isn't really a 'large investment' when its for the purpose of saving for a house deposit and if someone wants to safely save that sort of money for just a few years, it seems a little unconventional/irresponsible/fucking stupid to be recommending investing in an index and calling it safe and unlikely to fall.