Wanting to invest 10k but where's the best place to put it?

melissa'smoney

hi all,

I've recently won some money and i'm wanting to invest 10k of it but not sure where?

I have 2 options:

1. pay 10k off the mortgage (currently 85K) but not sure it'll make any difference?

2. invest in a high interest savings account for the future events, wedding, babies etc

Anyone got any advice?
Ideally if i'm going to save it i need somewhere where i'll get good interest but be able to get at it if i need to.

All help appreciated xxx

jbennett_2

You could give the money to me. Just think how happy you would feel to know that you have helped a first time buyer trying to get on the property ladder.

Send me a PM if you're interested in helping me. Thanks

Nagiw

melissa'smoney wrote: »

hi all,

I've recently won some money and i'm wanting to invest 10k of it but not sure where?

I have 2 options:

1. pay 10k off the mortgage (currently 85K) but not sure it'll make any difference?

2. invest in a high interest savings account for the future events, wedding, babies etc

Anyone got any advice?
Ideally if i'm going to save it i need somewhere where i'll get good interest but be able to get at it if i need to.

All help appreciated xxx

Depends if you think you will want the money at a later date. If not, I would pay it off the mortgage providing there are no penalties for doing so and especially if your on a fixed rate of interest (as this is likely to be high now). Why do you think doing this will make no difference?

melissa'smoney

Nagiw wrote: »

Depends if you think you will want the money at a later date. If not, I would pay it off the mortgage providing there are no penalties for doing so and especially if your on a fixed rate of interest (as this is likely to be high now). Why do you think doing this will make no difference?

Because i don't understand it, if i'm honest?! I'll ring them an enquire.

I think i'd ideally like to invest in and be able to use it at a later date, possibly towards my wedding, and earn some interest on it until my b/f proposes!! :rolleyes:;)

What are the best savings accounts at the moment? I did open the Halifax 6.5& one that was on MSE as a good saver(can't touch it for a year to get the 6.5% interest rate) so i'll probably put it in there inless you guys know of somewhere better?

xx

Nagiw

melissa'smoney wrote: »

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Because i don't understand it, if i'm honest?! I'll ring them an enquire.

I think i'd ideally like to invest in and be able to use it at a later date, possibly towards my wedding, and earn some interest on it until my b/f proposes!! :rolleyes:;)

What are the best savings accounts at the moment? I did open the Halifax 6.5& one that was on MSE as a good saver(can't touch it for a year to get the 6.5% interest rate) so i'll probably put it in there inless you guys know of somewhere better?

xx

You could try here.....

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

But check the actual rates with the bank to make sure they are up to date.

cos69

melissa'smoney wrote: »

[/b][/color]

Because i don't understand it, if i'm honest?! I'll ring them an enquire.

I think i'd ideally like to invest in and be able to use it at a later date, possibly towards my wedding, and earn some interest on it until my b/f proposes!! :rolleyes:;) ....

What you do depends on how much tax your paying. If your paying tax at 40% on your savings for example, then repaying part of the mortgage is a good option because thats likely to be costing you more than the interest you receive after tax.

You can also consider putting £3600 in a cash ISA if you pay tax leaving you £6400 and even then you can hold back another £3600 for next April's cash ISA

Olipro

jbennett wrote: »

You could give the money to me. Just think how happy you would feel to know that you have helped a first time buyer trying to get on the property ladder.

Send me a PM if you're interested in helping me. Thanks

Yeah, wouldn't things be so much simpler if they just gave everyone a million pounds eh?

ridiculous.
_________________________________________________

Melissa:

Find out what the APR on your mortgage is and then see what deal you can get on your savings; if you're normal rate tax payer, then 6% AER is about 5.2% after tax, so if your mortgage interest is more than that, just plough the £10k into it; but first check if they'll penalise you for doing so (and remember that in some cases, it can still make sense even with a penalty)

sloughflint

melissa'smoney wrote: »

[/b][/color]

Because i don't understand it, if i'm honest?! I'll ring them an enquire.

I think i'd ideally like to invest in and be able to use it at a later date, possibly towards my wedding, and earn some interest on it until my b/f proposes!! :rolleyes:;)

What are the best savings accounts at the moment? I did open the Halifax 6.5& one that was on MSE as a good saver(can't touch it for a year to get the 6.5% interest rate) so i'll probably put it in there inless you guys know of somewhere better?

xx

What is your mortgage rate and does it allow penalty free overpayments and access to the overpayments? Are you a basic rate tax payer?

Is your savings account a fixed rate?

We can then calculate if it is best to place the money in your mortgage.

melissa'smoney

sloughflint wrote: »

What is your mortgage rate (A variable rate currently at 4%) and does it allow penalty free overpayments and access to the overpayments? (i dont know i will have to check) Are you a basic rate tax payer? (No, i have a normal tax code if that makes sense?!)

Is your savings account a fixed rate? (yes i have the halifax regular savers which is at 10% which is payable on 22nd June 09)

We can then calculate if it is best to place the money in your mortgage.

(thank you)

sloughflint

melissa'smoney wrote: »

(thank you)

Going by what you said about your tax code, I think that you are a basic rate tax payer ( ie 20% rate rather than 40%) so unless any money goes into an ISA, the savings interest will be taxed and 20% deducted.

Your mortgage rate is very low so I think at the moment, your savings will out-do the mortgage rate.

1) Your regular saver. That is a very good rate but it only allows a maximum deposit of £500 per month.
You have 7 full months left to pay in the full £500 so need to place £3500 somewhere with a good rate and instant access. Check out this link for the best rates at the moment.

2) As a tax payer, you need to capitalise on the tax free status of a mini cash ISA if you haven't already got one. Place £3600 in one now and when your RS matures in June add a further £3600 from that into your ISA

3) That leaves £2900 from your £10 000 unaccounted for ( 10 000-3500-3600). You mentioned the Halifax 6.5

(can't touch it for a year to get the 6.5% interest rate)

Not sure what that one was ( unless it was the guaranteed saver reward which I thought was 6.25%) but 6.5% is 5.2% net so still better than your mortgage.

If that rate is fixed and the account allows more deposits, that would be a good place to deposit the remaining £2900 now that interest rates are plummeting.

When all these accounts reach their maturity date, it will be time to re-evaluate things with the mortgage.
Depending upon how flexible your mortgage is,all the time your overall net ( 100% of ISA rate , 80% of gross other savings rates )savings are greater than the mortgage rate, then it is best to save rather than overpay the mortgage.

sloughflint

To put some sort of numerical comparison:
If you opened a Tesco [strike]easy access[/strike] internet saver account for drip-feeding the £3500 ( I think it pays [strike]4.5%[/strike] 6%) and took a one year fixed ISA with Halifax at 5%......
The equivalent interest rate would be:

[500*0.8/7*(28*0.1+21*0.06)+( 3600*0.05+2900*0.065*0.8)]/10 000= 5.628% net
compared to your 4% mortgage until next June ( drip feed account is variable though)