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  • FIRST POST
    sir_spendalot
    Should i save or invest??
    • #1
    • 13th Nov 12, 11:54 PM
    Should i save or invest?? 13th Nov 12 at 11:54 PM
    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

    Josh
Page 1
    • missile
    • By missile 14th Nov 12, 6:32 AM
    • 7,984 Posts
    • 3,790 Thanks
    missile
    • #2
    • 14th Nov 12, 6:32 AM
    • #2
    • 14th Nov 12, 6:32 AM
    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
  • opinions4u
    • #3
    • 14th Nov 12, 6:39 AM
    • #3
    • 14th Nov 12, 6:39 AM

    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
    Originally posted by sir_spendalot
    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
    • By ColdIron 14th Nov 12, 8:18 AM
    • 2,243 Posts
    • 2,468 Thanks
    ColdIron
    • #4
    • 14th Nov 12, 8:18 AM
    • #4
    • 14th Nov 12, 8:18 AM
    Best advice you will get all day - Don't invest with Barclays
  • xtinataguba
    • #5
    • 15th Nov 12, 5:09 PM
    • #5
    • 15th Nov 12, 5:09 PM
    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
    • #6
    • 15th Nov 12, 7:12 PM
    • #6
    • 15th Nov 12, 7:12 PM
    how much of your money are you prepared to lose ?
    • mania112
    • By mania112 15th Nov 12, 7:30 PM
    • 1,855 Posts
    • 701 Thanks
    mania112
    • #7
    • 15th Nov 12, 7:30 PM
    • #7
    • 15th Nov 12, 7:30 PM
    Savings comes before Investments in the heirarchy of 'what to do with your money'
    • dunstonh
    • By dunstonh 15th Nov 12, 8:36 PM
    • 81,036 Posts
    • 46,319 Thanks
    dunstonh
    • #8
    • 15th Nov 12, 8:36 PM
    • #8
    • 15th Nov 12, 8:36 PM
    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). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • xylophone
    • By xylophone 15th Nov 12, 8:45 PM
    • 15,063 Posts
    • 8,135 Thanks
    xylophone
    • #9
    • 15th Nov 12, 8:45 PM
    • #9
    • 15th Nov 12, 8:45 PM
    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
    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.

    Withdrawn possibility follows, do not act on it until the situation is more clear.

    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. Use this TransferWise link to sign up and £20 will be added to your first payment. So far as I know I receive no benefit as a result of you using the link. 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.
    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.
    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.
    Last edited by jamesd; 16-11-2012 at 10:21 PM. Reason: removed link that turned out to provide me with some benefit. update on tax handling.
    • nicknameless
    • By nicknameless 16th Nov 12, 12:00 PM
    • 500 Posts
    • 271 Thanks
    nicknameless
    Although no sensible investor would go near a bank.
    Originally posted by dunstonh
    Am I stupid to have started holding a range of HSBC trackers via their global investment centre then, or is the above a generalisation?
    • dunstonh
    • By dunstonh 16th Nov 12, 12:15 PM
    • 81,036 Posts
    • 46,319 Thanks
    dunstonh
    Am I stupid to have started holding a range of HSBC trackers via their global investment centre then, or is the above a generalisation?
    Originally posted by nicknameless
    Dont mix up bank products supplied to the whole of market with bank products retailed in branch. In branch, HSBC would usually try and flog their awful world selection portfolio funds for example.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • kylehp04
    If you don't want to risk any potential losses then don't invest. However if you do decided to invest, make sure you find out how much your bank or provider will charge you in fees because this could eat into a large sum of your investment.

    Make sure you do some research first. Do you want to invest in a stocks and shares isa? If so the limit for this financial year is £11,280. Do you want to invest in funds? You can open your ISA with your bank or go through an IFA or you can choose to DIY investment provider.

    There are many things to consider when investing. Like how long you want to invest for, do you have a target amount? Etc

    There are a few blogs that will help you research.

    Here are some links:
    http://monevator.com/category/investing/
    https://www.rplan.co.uk/forum/-9/rvoice-the-rplan-blog
    http://www.sterlingeffort.com/category/investing
    • lvader
    • By lvader 21st Nov 12, 9:19 PM
    • 1,856 Posts
    • 1,574 Thanks
    lvader
    Nothing wrong in buying shares as a 2-3 year investment as long as you accept the relatively high risk. I've bought shares, doubled my money and sold within less than a month. I've aslo had a couple turn out do be complete losses less than a year after buying them. I don't see the point of holding onto shares for the long term just for the sake of it, buying low, selling high, then buying low again works for me.
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