Should i save or invest??

Hi Guys,

I recently inherited some money of which i want to put by £15,000 - £20,000 for a house deposit in 2-3 years time, however i want to put it an account that will give me maximum interest returns, i am willing to risk it with investment accounts with Barclays who i bank with, but the problem is i havent a single scooby dooby doo on how these accounts work or what returns to expect in return.

I really dont want to wait 2 weeks for an appointment with my bank manager to discuss it all as i dont want the money sitting round doing nothing.

Could anyone explain to me about investment options through the bank and also any other advice on the best way to make good returns on this sum of money over 2-3 year period?

Any help is much appreciated :beer:

Josh
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  • missile
    missile Posts: 11,684
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    What do you think are good returns?

    2-3 years is not really long enough for investment, unless you want to take a punt on risky investments? Might as well put it on black or the 3.30 at Newmarket.

    Do not waste your time visiting Barclays for advice. You can read what they have to offer on their web site.
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home :iloveyou:
  • opinions4u
    opinions4u Posts: 19,411 Forumite

    I recently inherited some money of which i want to put by £15,000 - £20,000 for a house deposit in 2-3 years time, however i want to put it an account that will give me maximum interest returns, i am willing to risk it with investment accounts with Barclays who i bank with
    Are you insane?

    1. Investing for such a short period of time is poor strategy. Save, using cash ISAs as the cornerstone.

    2. Bank investments usually give you the best combination of high charges and poor performance.

    Links at the top of the page.
  • ColdIron
    ColdIron Posts: 8,898
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    Best advice you will get all day - Don't invest with Barclays
  • investing- is along term. you can get something in return, it can be a huge turn out if it goes really well. saving is a short goal. if you want to invest, make sure of it. study want you want to invest in.
  • gozomark
    gozomark Posts: 2,069 Forumite
    how much of your money are you prepared to lose ?
  • mania112
    mania112 Posts: 1,981
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    Savings comes before Investments in the heirarchy of 'what to do with your money'
  • dunstonh
    dunstonh Posts: 116,036
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    i am willing to risk it with investment accounts with Barclays who i bank with

    I thought Barclays had pulled out of investment advice. I know they were toying with non-advice options though. Although no sensible investor would go near a bank.

    However, that is largely an irrelevant issue here as your time-scale is far too short to be suitable for investing unless you are very high risk in nature and an experienced investor with the capacity to afford short term losses.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • xylophone
    xylophone Posts: 44,139
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    If you need the money in such a short time, you should consider using your cash ISA allowance/regular savings accounts/ possibly 2 year fixed rate bonds etc? Investment needs a longer time scale.
    http://www.thisismoney.co.uk/money/saving/article-1583864/Best-savings-rates-Isas-Cash-Isa-accounts-fixed-rate-Isas.html
  • jamesd
    jamesd Posts: 26,103
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    edited 16 November 2012 at 10:21PM
    Low risk would be something like the 8% interest on the £300 a month First Direct regular saver account for a year. That and normal savings accounts are the standard advice for the period you're considering.


    There are many unit trusts that you can hold within a stocks and shares ISA that will pay 6-8% tax free that way or you can hold them outside an ISA. As with all investments the capital value varies, so it is not the case that the highest interest rate/yield is best. You can sell at any time unless something truly exceptional is happening at the time, in which case the fund managers are allowed to delay sales for a while.

    I did invest deposit money and did very well out of it but you do need to be willing to accept higher than usual risk or be flexible with your timing. The risk comes in part from the chance that you will be forced to sell at a time when the capital values are low. So flexibility reduces that risk.

    [STRIKE]Withdrawn possibility follows, do not act on it until the situation is more clear.[/STRIKE]

    For high risk and higher potential returns, you might get 16-18% or so a year before tax using isePankur. That's an Estonian peer to peer lending company and there are options to lend initially for a maximum number of months, that you can reduce over time to stay within your time horizon. But it has both the high risk nature of the P2P lending product and foreign exchange risk to consider so it's definitely one only for those with high risk tolerance! If you choose to try this, the most efficient way I know to send money there is using TransferWise in chunks of £300 a time. That has a £1 fixed fee up to £300 or about 0.45% above that, so £300 is cheaper than higher or lower than £300. [STRIKE]Use this TransferWise link to sign up and £20 will be added to your first payment.[/STRIKE] So far as I know [STRIKE]I receive no benefit as a result of you using the link[/STRIKE]. Added later: it turns out that I could get free transfers and since that would be a benefit to me I've removed the link. You cannot exit early from the loans you make at isePankur and it is inevitable that some will go bad or take longer than expected to repay, so be sure to allow for that in your time planning.

    There are two possible disadvantages to using isePankur that you should know about, I'm still checking them:
    1. It will produce foreign income. This means that you will be required file a tax return even if you don't have to already. You will be responsible for telling HMRC about the need for a tax return.
    [STRIKE]2. Interest is normally calculated at the exchange rate when it is added to your account. You can expect to receive at least one payment every day, quite possibly many more. It might be impractical unless isePankur can help with the work.

    So I withdraw the suggestion to consider isePankur until it is more clear to me how practical complying with UK tax law will be.[/STRIKE]After more checking, you can choose which of the possible exchange rates to use when working out what to put on your tax return. Can use the one at the time of each transaction, or some average and HMRC supplies some averages that can be used, including one for a whole year. So it's practical to do the tax things even for the frequent small interest payments you can get with P2P.
  • dunstonh wrote: »
    Although no sensible investor would go near a bank.

    Am I stupid to have started holding a range of HSBC trackers via their global investment centre then, or is the above a generalisation?
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