£10,000...?

pleeplop · 30 December 2012 at 1:43AM

I have £10,000 in my Santander savings account...and at 0.5% interest it's not doing anything! Does anyone have advice on how I could put my savings to better use?

It's taken me a long time to save but I've just gotten a new job and am hoping to put away money more regularly this year.

I don't have a clue about what options there are, let alone which is best for me...help?!

Masomnia · 30 December 2012 at 1:53AM

Tax payer? If so best looking at ISAs.

After that it's a question of whether or not you're happy to tie your money up.

Jox · 30 December 2012 at 2:00AM

Here's some different options to consider

http://www.moneysupermarket.com/savings/

bowlhead99 · 30 December 2012 at 2:41AM

intro: anyone who's flicked through my post history will see I'm always keen to help others out with ideas and engage in discussion; of course, whether the advice is any good or not is not for me to say

And everyone is welcome here, so no offence intended. But on this occasion I'm just going to stick my neck out here and call out the question from 'pleeplop' as a troll post.

Firstly, if you're asking a question in the forum, you've presumably read all of the 'Banking & Saving' section of the website and learned how to get tax free interest of several times more than the paltry 0.5% on your 10k, current best-buy regular savings accounts for your future needs, etc.

Then you've discovered this forum so presumably you've bothered to flick back through any relevant sounding threads which had posts in the last month. My view shows 20 threads each page, and over 15 pages with postings in December,so plenty to get started. Just looking at the 15 most relevant-sounding threads, you'd see:

'I have 20k and don't know what to do'
'5000 in savings...'
'what to do with 40k...
'have an ISA what next'
'10,000 to invest for a house deposit'
'best place to invest 30,000...'
'what to do with 7k'
'best home for 55k''
'!f I have the 5.7k to max an ISA'
'best thing to do with my money'
'what best to do with 17k savings'
'where shall i put my money'
'how best to invest a sum of 30,000
'savings ignorance'
'best place for my savings'

The other 300+ threads with December postings are also crammed with relevant information about options and experiences with savings and investments. Not to mention the dedicated sub-forum with 80+ December threads specifically about ISAs. The search function will open up thousands more older ones.

If you need more specific help, what you need to do now is to tell us what it was about those articles or threads which you didn't understand, and what you are looking for in terms of ideas for your specific situation and goals that hasn't already been done to death in the last 6-months or so.

Otherwise Masomnia's answer is the obvious one, and even if you reply you'll still get some people saying 'change to the Santander 123 account'; others 'open Lloyds Vantage account', others 'get the best-buy instant access ISA'; some 'get a fixed ISA', some 'I have XYZ investment fund' etc etc.

I don't usually bother replying to this sort of thread because anyone who's read a few of them is equally qualified to help you out and I won't have anything to add. But just thought I'd share my reasoning. Good luck :beer:

pleeplop · 30 December 2012 at 3:01AM

um I think you've misunderstood the concept of trolling 'bowlhead99'

there doesn't seem to be all that much difference between the different options available which makes it harder/more confusing to choose. I've also been told by some that I should just sit tight and wait until some better interest rates are on offer- is this likely to happen anytime soon?

As for tying my money up...I'm hoping to move out asap (the reason for saving) but am not sure if that's likely within the next year. Would the benefits of a fixed term arrangement be likely to outweigh the risk of an early withdrawal fee?

Robin_TBW · 30 December 2012 at 3:28AM

First - Open a Cash ISA. Put £5,640 into it (the maximum).
Second - Open a Instant Access Savings account and drop the rest in there.
Third - Open a Regular Savings account and set up the standing order to pay in the maximum per month from the IA to the RS. Whilst this is going on keep paying any money you want to save into the IA.
Forth - Come April 6th, transfer whatever is in the IA into the ISA (upto £5,760).
Finally - After all the accounts have been open for a year it's time to move it all around again.

That's what I think anyway.

Masomnia · 30 December 2012 at 3:33AM

Agree with Robin. The benefits of fixing are marginal at best these days, if there's any chance you'll need the money then I wouldn't bother personally.

ColdIron · 30 December 2012 at 9:05AM

I find it hard to disagree with bowlhead99 in principle. And as for the recent spate of 'I earn 200K, have 2 squizillion in savings, is this a lot for a 20 year old?' ...

innovate · 30 December 2012 at 9:45AM

Well put, bowlhead99. It's amazing how little research some people - in particular newbies - seem to have done before they ask question for which the answers are right in front of them.

The other thing that amazes me is that some of them get quite skirty when they aren't getting spoon-fed, or when they have some undisclosed preconceptions that aren't being supported by the responses.

As it happens, I think pleeplob is genuine, but that's no excuse for not doing the groundwork themselves before asking for help.

brasso · 30 December 2012 at 10:22AM

pleeplop wrote: »

I have £10,000 in my Santander savings account...and at 0.5% interest it's not doing anything! Does anyone have advice on how I could put my savings to better use?

It's taken me a long time to save but I've just gotten a new job and am hoping to put away money more regularly this year.

I don't have a clue about what options there are, let alone which is best for me...help?!

As always, it depends on your attitude to risk.

Here's where I'm coming from -- I'm not sure why anyone would bother putting money into a savings account (even the highest paying fixed term ones) unless their aim is simply to preserve their capital i.e. they don't want their money either to grow or shrink. Just want to keep it at that level. With inflation at roughly the same level as savings interest rates, that's exactly what you'll get with a fixed savings account. If you have your 10K in a 0.5% current account, you are actually losing a couple of hundred pounds a year through the effects of inflation.

If it were me, I would put it all in a stocks and shares ISA where you can choose your own investments (I use Hargreaves Lansdown, but there are many others). With 10K, I would then select 4 or 5 investments that would give me some income. There are plenty of reliable dividend payers giving 5,6 or even more % a year. Plus, if you choose wisely, you have a very good chance of the capital growing over the next year.

I repeat -- IF IT WERE ME, this is what I would do. You are not me.

But remember -- if you want only to preserve the value of your money, with no possible reduction but no possible growth either, put it in a savings account.

Two big caveats re stocks and shares investment:

1 -- if you know for sure that you will want to use this money within a year or two, then it's not a safe option as there may be a dip in the market that will take longer than that to correct. Unlikely, but possible.

2 -- Even more important is the need to remain calm during volatile periods. The biggest mistake that newbies make is to start panicking when their investment drops by 5% or 10% -- as does often happen. They sell up, relieved that they have only lost 10%. If they check the share price 6 months later, they will likely see it has risen well over the original price again. So patience and calmness is required.

DUTR · 30 December 2012 at 10:37AM

brasso wrote: »

As always, it depends on your attitude to risk.

2 -- Even more important is the need to remain calm during volatile periods. The biggest mistake that newbies make is to start panicking when their investment drops by 5% or 10% -- as does often happen. They sell up, relieved that they have only lost 10%. If they check the share price 6 months later, they will likely see it has risen well over the original price again. So patience and calmness is required.

Years ago I took £300 of shares with a view to beating the savings account, within a week the value had gone up 9% great, but now they are worth less than £80. Like the OP I have £10k+ earning £1.49 per month, but I also have the last 3 years of ISA maximum, so another before April 2013 is not possible. I have some shares ready to be sold when my next car is due, it seems realistically 2% or thereabouts is as good as they may get

£10,000...?

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