What to do with inheritance?

[Isitmeyourecookingfor]

What would you do with £5K inheritance (this is after a holiday and clearing minimal credit card debt)?
I'm equity rich for now (living in the family home with 2 kids, 50/50 custody) until we decide to sell and split profits 50/50- then I will 'only' be able to afford a flat in this area with a mortgage on my NHS wages. I have 3K savings.
Thanks

I wouldn’t do anything with it. I would keep it as savings tbh

Keep it for a rainy day.

Savings

Yes sorry, I intend to save it, but where?
ISA/premium bonds/lock away.
I guess it's not that much to make a difference on interest

Premium Bonds. Safe and you can get at it if you need it.

Premium Bonds. Simple to do, easily accessible and you might win something.

Look for the best interest rate you can, probably in an easy access account (assuming you'll need to use some of it soon to help with your moving expenses). If you're a higher rate tax payer, then probably an ISA as the interest is not taxed.

Have a look on Money Savings Expert. He'll talk you thru premium bonds or interest rates depending on basic/higher tax status.

cash isa at the best rate you can find.

Cash isa . Look at MSE for best rates

Absolutely a stocks and shares ISA. Ours are in a FTSE 100 fund, keep squirrelling away spare cash and reinvest any profits. Don’t touch unless under the most dire circumstances.

I don’t think the return on premium bonds is very good. A cash isa is best - have a look at Martin Lewis for the best rates

Not premium bonds. Don't k ow why everyone on here recommends them. Go on any actual money site and they will be way down the list of things to do with your money. You aren't guaranteed anything back and for such a small amount you are more likely to just erode the value of the capital. As you only have £3000 in other savings there is no real need to put it in a cash ISA rather than a normal savings account. If you can leave it for a minimum of 5 years, preferably 10 than stick it in stocks and shares. If you may need it then a high interest savings account or cash ISA whichever is better rate. You can still get around 4.5% in normal savings accounts for now.

As others have said, I would put the money into a cash ISA. I’m no expert but I would have thought stocks and shares ISAs are more suitable for larger amounts and medium to long-term savings.

Buy Premium Bonds with it.

Don't buy premium bonds with £5k! You will likely go months, even years without winning anything. Unless you have £30-40k in those you don't win very often.
Just put in a good savings account.

Thanks guys, I have my £3k in a high interest account 4.75% so I'll put it in there with that. I'll check out ISA's too

I’d put half into a S&S ISA and use the other in Premium Bonds (aside for home improvements.)

Already having £3k in savings is good! I assume it’s your emergency fund?

This.

Tbh, if OP only has 3k savings, I don’t think she can afford to take any risks with S&S isa. Nothing is risk-free at the moment, not with Trump around. My portfolio is fairly conservative, but I still ‘lost’ around 20k on paper when Trump started his market manipulations. Yes, I’ve made it up now, but I can afford to ride out any bumps.

If OP only has a small amount of rainy day savings, then she needs something easily accessible and safe. So a cash isa, or the highest rate easily accessible account sounds the right idea.

Why are people saying premium bonds? they are generally not very good unless you have savings elsewhere that would attract tax. Just find the best paying savings account or cash isa you can, as this will then take you current £3k to £8k which I imagine takes you a lot closer to having a six month emergency fund.

Cash ISA interest rate is usually lower than normal high interest saving account. As your total saving is £8k, the interest is likely less than £1k and if you are not a high rate tax payer, then there is no need to use cash ISA. Cash ISA is good if you expect that your saving interest will go beyond £1k/year (for basic rate tax payer) and £500 (for higher rate tax payer).

It happens on just about every thread. I think it is because most of the people replying don't really understand what they are talking about. The amount of people saying cash isa or premium bonds as no tax to pay on the interest seem to have missed that OP is nowhere near the point where tax would need to be paid on the interest.

I don’t think your numeracy skills are up to scratch. OP will already have £8K in savings once they get the £5K inheritance.