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Investment options for lump sum
NozzaC
Posts: 17 Forumite
I'm selling up and renting. In order to cover costs I will be using the interest from the equity. Let's say it works out to be £140K.
I'm not planning to buy again for about a year - unless there was a sudden upturn in house prices where I'd be forced to buy.
What are the best options?
I'm thinking that as interest rates are predicted to fall over the year I might be best to go for a fixed rate bond. I've seen rates like c.6.7% AER gross. Since I need some monthly income I'd need to deduct some money before investing it. Let's say I need £600/month. So I'd take £7200 and put that in a high interest savings account with no penalties. A Standing order can then move £600/mth to my bills account. I'd get some, ever diminishing, interest from the £7200 too.
Is that a better option than trying to just take monthly interest from the whole £150K? I'm confusing myself about the impact of compounding.
Or are there any other, better options?
Thanks in advance
I'm not planning to buy again for about a year - unless there was a sudden upturn in house prices where I'd be forced to buy.
What are the best options?
I'm thinking that as interest rates are predicted to fall over the year I might be best to go for a fixed rate bond. I've seen rates like c.6.7% AER gross. Since I need some monthly income I'd need to deduct some money before investing it. Let's say I need £600/month. So I'd take £7200 and put that in a high interest savings account with no penalties. A Standing order can then move £600/mth to my bills account. I'd get some, ever diminishing, interest from the £7200 too.
Is that a better option than trying to just take monthly interest from the whole £150K? I'm confusing myself about the impact of compounding.
Or are there any other, better options?
Thanks in advance
0
Comments
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Given your timescales you should not invest. You should stick to savings.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.0
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