£25K to invest for school fees

tidyfinance

I'm really facinated by all this financial advice, but it is hard for a pleb like me to take all this in (sorry).
So, I should house the £25K into a high interest feeder account, and pay £3K/yr into an ISA. Yes?
Thanks for all this great advice.

dunstonh

How many years are you looking at in total?

Also, please do note, that nothing here is advice. Its discussion to help you investigate your options. Advice carries a legal liability and is designed to give best advice. What you read here could be best advice. It could be worst advice and there is no legal liability.

tidyfinance

I fully understand your comments - I realise that this forum is for discussion purposes.

I would be looking at 5 years in total. This years fees have already been sorted. The £25K is for the subsequent years and I could add to this total as the years progress to accommodate rises in fees.

dunstonh

Now, if it was me, I would look to cash ISAs for the early years but put a bit in commericial property unit trusts (to move into ISA when allowed after April 2006). Its a sector which has no guarantee on capital but in 20 years, there has not been a negative year. Not advice, no guarantee that the future will be the same but when you are looking 4-5 years away for some of the money, a small amount in an equity ISA wouldnt do any harm. Only if bought on discount terms though. I would also pick a fund supermarket that has multiple funds in that sector to ensure the holding with each company is limited and wouldnt face potential issues on withdrawal.

Although, thats me. I stick money into a unit trust every month to pay a tax bill due every January. I accept the risk/reward potential that goes with that.

tomstickland

So, I should house the £25K into a high interest feeder account, and pay £3K/yr into an ISA. Yes?

No, take out an ISA straight away at 5%, and then take out another one in April.
Meanwhile open a 10% reg saver and maybe a 7.5% reg saver and move the max money possible into each of these per month.
If you move £250 per month from a 5% paying account into a 10% paying account then the overally effective interest rate on the £3K is around 7.5%. ie: the average of the two rates.

tidyfinance

Guys, this isn't being taken in by me - Goodness I feel so thick!
Having looked for some good mini cash ISA's, First Direct e-ISA are offering 5.50% AER
5.37% GROSS. These rates are fixed until Feb 2006, when they revert to
4% AER
3.93% GROSS.

Could I opt for something like this and then move after Feb? It doesn't seem much time before I have to move though does it?

What is the difference between a cash ISA and a mini cash ISA?

Any good sites I can view (other than this one) thay will give me a current league table for current, ISA accounts, and commercial property unit trusts please?

Your answers on this are very much appreciated, I'm looking to house this money this week and get things moving - once I've got my head around the options available to me.

tomstickland

MSE http://www.moneysavingexpert.com/savings

Beware though, the owner, Martin is a right dodgy geezer.

tidyfinance

OK, So, I'm going to open an ISA (Halifax or Firstdirect - moving the latter after feb). I'll get my wife to open an ISA also.
We'll transfer £3K each into our ISA's, and feed these through.... maybe an A&L account, paying 5.5%.
I, nor my wife can have more than one ISA can we?

Have I finally got the hang of this, or are my options still lying elsewhere????

tomstickland

Sounds fine to me. ISA is a tax reduction vehicle, so use your max allowance every year.

tidyfinance

Goodness, another late worker!!
I've slightly altered my comments, please take a look.