£15,000 to invest and I don't know what to do

zippygeorgeandben · 17 July 2008 at 2:21PM

Hello everyone,

First time posting in this particular board. I hope you are all as friendly as the DFW's and the House Buying board, time will tell I suppose!

I have recently been given £15,000 which is sitting in my current account and I am unsure as to what to do with it. I'm looking for any pointers here.

I currently put £300 into my ISA each month so I've put about £900 in since the start of this financial year and this accrues interest on a monthly basis.

Me and my partner have been studying the property market for the last 8 or so months now and realise it's best to keep renting at the moment before buying our first property. This £15,000 could come in very useful to help build up/towards our deposit and the quicker I stick it somewhere beneficial, the better (at least that's my thinking anyway). It could do with going into an account where it can be withdrawn at any time as if we find a property in 6 months time, I don't want to be in the situation where it can't be used as I am unable to with draw it due to the terms of the savings scheme.

The alternative is to use part of this £15,000 to pay of a graduate personal loan (currently standing at £1400 but if i pay it off in full, I can pay only £1300 of it back, thus saving £100 pounds in the process) or fully pay off my student loans which stand at around £4,000 gathering annual interest at a low rate.
I have just started paying these student loans back monthly as I am now over the threshold so I currently pay them approx £95 a month. I suppose I could pay off my student loans, my Graduate Personal Loan out of this £15,000 and the £220 a month I currently pay towards my GPL and student loans, I could put into my ISA thus increasing my ISA payment to £520 a month.

I hope that made sense!

Thanks for reading and any advice would be appreciated.

Ben

debbie42 · 17 July 2008 at 2:28PM

For the short term you're interested in, it's not investing you want, but savings, from the sound of it, and you should be making your cash work for you as hard as it can.

It depends on the interest rates of your student loans etc. but if you can get better rates elsewhere then you could maybe get more by putting the capital into higher paying accounts?

There are some good rates on regular saves, fixed rate term savers, and cash isas, with some threads on here (and the ISA sub-forum) on all these things.

oldandgrumpy · 17 July 2008 at 2:30PM

Maximise your annual ISA holding for one. Fill up with petrol and food, they always seem to go up. Me, I'd take a very long holiday, somewhere warm, come back refreshed. Preferably not in the Euro zone, though.

zippygeorgeandben · 17 July 2008 at 2:32PM

Thanks Debbie42,

I did consider quickly joining up to Halifax's one (it came on Martins weekley email) and putting £500 away each month, increasing my ISA standing order and then using the money off to pay my Student Loans, I think the interest is always in line with whatever the Bank Of England state, is that 3.8% or similar?

The other side of the coin is I find a property but haven't got a big enough deposit and I could easily say "well yes I may not have a deposit as big but I've increased my ISA payments and paid off my student loans". I don't think will cut it do you!

Ben

debbie42 · 17 July 2008 at 2:43PM

If it's that low a rate then you'd be better off putting the cash in a higher rate account anyway (unless you're a higher rate tax payer?). There are some good instant access accounts which pay 6% +. You'd also be better off lumping the max amount for your yearly allowance into the cash ISA now, if you can, as the interest will start compounding more earlier then, rather than monthly payments.

That lot are all instant access, so don't affect your deposit, and will grow your cash faster than paying off your student loan (potentially).

zippygeorgeandben · 17 July 2008 at 2:43PM

old and grumpy, don't need to stock up on Petrol as I don't drive!

zippygeorgeandben · 27 July 2008 at 3:16PM

I decided to max out my ISA for this financial year which meant putting £2769 into it. This means i've had to cancel by standing order of £300 per month into my ISA as I've reached the allowance so this still leaves me with circa £12K and the £300 pm to put somewhere.

i have read A&L have a 12% interest saver although you can't withdraw for the year of the contract.

Thanks or reading
Ben

j-man_5 · 27 July 2008 at 3:31PM

If your thinking of buying a house in the near future it would be best in my opinon to put your remaining 12k in an instant access account. There are many which you can manage online paying 6.5%+ and there are no strings attached so you can withdraw the money when needed. I just opened one with Kaupthing Edge, it made more sense than opening a regular saver because I had a lump sum rather than it being an account to put a bit in each month. Hope this helps!

zippygeorgeandben · 27 July 2008 at 3:53PM

Cheers j-man, let me be the 2nd person to thank you now. 2 thanks in 2 posts = 100%!

stogiebear · 27 July 2008 at 6:40PM

Pay off your existing debts... surely this is a no brainer, right?

Even when you go to apply for a mortgage you'll be penalized for any existing debts.

How about being a debt free Briton? It makes you a minority but at least you won't get shunned by the BBC!

MABLE · 27 July 2008 at 6:47PM

stogiebear wrote: »

Pay off your existing debts... surely this is a no brainer, right?

Bit of a sweeping statement. If the interest on current debts is lower than what can be achieved by putting into a high interest savings account then do not pay them off. However if they are then pay those debts off.

As you say no brainer!

£15,000 to invest and I don't know what to do

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