£60k to invest HELP needed

nick22_2

My dad has just had a investment mature of £60k and is looking for somewhere to invest it for aprox 3 to 5 years,
He doesn't want to take any risks with the capitol and already has used up his ISA limit.
I was thinking about a bond or a GEB .
Any advice would be apreaciated .

dunstonh

I was thinking about a bond or a GEB .

Is an investment bond the most tax efficient option for him?
What investments would he hold inside the investment bond?
Investment bonds typically have no capital gurantees (a few exceptions) so unlikely to be a good option here. Plus, they are for terms in excess of 5 years.

What type of GEB is he looking for? One measured under capital gains tax or income tax?

nick22_2

some one has mentioned Norwich union GEB and i have been looking through the forum and found one called the premier which sounds interesting.
As for tax i don't think it makes much of a difference as he is a basic rate tax payer at 20% and capitol gains tax is 18%.

dunstonh

As for tax i don't think it makes much of a difference as he is a basic rate tax payer at 20% and capitol gains tax is 18%.

Correct. However, the first £9600 of any gains are tax free under CGT. So, a CGT version can be quite efficient if you dont use your personal allowance elsewhere.

EdInvestor

Does he need income?If not, N&S I index linked certificates could be a good slot for some of the money (up to 30k) at the moment.They pay inflation plus 1% tax free.

nick22_2

He doesn't need income but 1% above inflation is about 5% net and inflation rate changes all the time.
The state bank of India is paying up to 6% net and will remain that for the term.

riad_2

Top paying bonds according to moneysupermarket at the moment are the icici 1 Year Fixed at 7.20% gross (5.76 net), and Kaupthing Edge 1 Year 7.15% gross (5.72 net).

edit: Per your last post I see the state bank of india bond you're referring to paying 7.50% gross! That is a fantastic rate! Note I think you have to open it at a branch though.

Per their website it is covered under the FSA:

State Bank of India is regulated by the FSA and is a member of the Financial Services Compensation Scheme established under the Financial Services and Market Act 2000. The Financial Services Compensation Scheme protects deposits held with our UK branches.
Payments under this scheme are limited to £35,000 of your total deposits with us. In practice, this means that each of our customers will be compensated upto a maximum of £35,000 of their total deposits. Where two depositors hold a joint account, each depositor may receive a maximum of £35,000 compensation in respect of their claim, giving a total of £70,000.

EalingSaver

nick22 wrote: »

He doesn't need income but 1% above inflation is about 5% net and inflation rate changes all the time.
The state bank of India is paying up to 6% net and will remain that for the term.

Well actually no. The NS&I uses RPI not CPI as the index; RPI has been tracking higher than CPI for quite some time. At the moment its about 5%, making the effective rate at the moment 6%, tax free.

But yes inflation does change and you'd certainly expect/hope that it will be considerably lower than this by the time the 3 or 5 year certificates mature. However, a point that is often missed is that you don't actually have to hold for the whole term. As long as you hold for at least one year you will get a decent rate if you break out.