Where to put £19,000 maximum security

mattih5

Hi,

I have £19,000 to put away, I'm looking at the least amount of risk possible so don't want to be investing through stocks and shares etc. I haven't utilised my ISA allowance this year and was perhaps thinking of opening an ISA with the Manchester Building Society as this seems to be the best available at the moment.

Around £9k of this will be put in a simple savings account where I can get instant access to it as I have a few things I would like to purchase over the coming months.

I'm a little unsure about where to put the remaining £6,400. I was thinking of a bond but am not sure which is the best to look at. This can be locked away as I don't think I'll need to get access to it immediately as the £9k should be enough.

I'm open to suggestions and ideas, thanks.

nicholbb

do you have a friend/partner (who you can trust and) who won't use their ISA allowance and could invest for you?

[Deleted User]

Hi,

I'd suggest the following:

1. Generally ISA's are a good place to start:

http://www.moneysavingexpert.com/sav...gs-without-tax
and http://forums.moneysavingexpert.com/....html?t=401374

2. Regular savings accounts are good too:

http://www.moneysavingexpert.com/sav...vings-accounts
and http://forums.moneysavingexpert.com/....html?t=608697

Regular savings accounts are generally a good place for new money e.g. monthly pay cheques, however if for example you have £3k in a 6% high-interest bank account drip-feeding into a 10% regular savings account then you're essentially getting 8% interest on average for your £3k which beats most fixed rate products - albeit with a bit more work.

3. If you want something with a little less work then fixed rate savings accounts are a good option:

http://www.moneysavingexpert.com/sav...interest#fixed
and http://www.thisismoney.co.uk/saving-...&in_page_id=50

4. One other thing you might like to consider is getting a decent instant access savings account:

http://www.moneysavingexpert.com/sav...st#topaccounts
and http://www.thisismoney.co.uk/saving-...&in_page_id=50

5. Finally if you're a higher rate tax payer then NS&I's 3 and 5 year Index Linked Savings (http://www.nsandi.com/products/ilsc/index.jsp) look good, paying 1% above the RPI inflation rate. Currently this is 4.8% so that’s a rate of 5.8% overall.

The attractiveness of these is that the savings are tax-free meaning it's better for higher-rate taxpayers. Basic rate taxpayers would need to earn 7.25% in a normal savings account to match this, while higher rate taxpayers would need 9.66%.

One thing to note is if inflation drops then so does the rate for these savings. It'll always be higher than inflation and tax free though. The cash must be left there for at least three years thought and at least £100 must be deposited (maximum is £15,000), so it's not for those who want a short term place to save.