Newbie in need of money savings advice!....

Addz

Hi,

Please excuse if the answer to this question is an obvious one!

Basically, I have just come into £4,000 and would like to know what best to do with it savings wise.

I dont want to risk it on anything like stocks and shares etc, but dont want it sitting in a poor interest giving current account either!

From reading this website (which is very informative!) I have come to the conclusion that the best thing to do is to stick £3000 in an ISA (from the Halifax), which leaves me with £1000 left over. Now should I just wait until April (in which ill get £1000 ISA allowance for the next year), and stick the £1000 ontop of the original £3000. Or should I slowly drip feed the left over £1000 into a high interest savings account (I think it was the 8% Halifax one).

What would be the most beneficial thing to do?

Is the halifax ISA and savings accounts the best at the moment?

Any help on this would be most appriciated :j

worried_and_confused

Well as you already have the £4000, you need to save it from today, so that you aren't losing out on interest (or tempted to spend it!). So stick it into an instant access savings account until April, and then add it to your ISA.

crossleydd42

Much will depend on how much savings you already have (you should keep about £1000 in a instant savings account for emergencies) and how long you don't need the money for. If it's less than five years, consider a mini-cash ISA for this year and next year. If it's more than five years, take the halfway route between shares and savings accounts and go for an excellently run Income unit trust as an ISA. An excellent one is the Rathbone Income UT. Arrange that the distribution (like a dividend) buys more untis.

You can read its plaudits and other information on its website. http://www.rathboneunittrusts.com/

A well-run income UT set up like this will produce income AND growth well above inflation over the years and you can sleep well at night.

It's worked well for me over the years and now, with the distributions paying out to me, helps to fund my retirement!

Addz

worried_and_confused wrote:

Well as you already have the £4000, you need to save it from today, so that you aren't losing out on interest (or tempted to spend it!). So stick it into an instant access savings account until April, and then add it to your ISA.

Thanks for the reply. I dont have an ISA yet, what i meant in my first post was to get one now with the £3000 allowance for the 05-06 tax year, and then add the further £1000 when i get the 06-07 tax year allowance.

Or does it not work like that?

This money is to be saved, I have no intention of spending it in the next year, although possibly in the next 3, hence id rather have an ISA type savings, than anything risky.

So can i open a £3000 ISA now, and then top it up with the £1000 after april?

dunstonh

Rathbone Income unit trust is medium risk and is share based. Addz has eliminated that option.

With the added comment saying around 3 years, this would limit low risk ISAs such as property funds, corp bonds and gilts as well. Leaving a cash ISA as the most likely option to be considered.

Skint_Catt

Addz wrote:

Thanks for the reply. I dont have an ISA yet, what i meant in my first post was to get one now with the £3000 allowance for the 05-06 tax year, and then add the further £1000 when i get the 06-07 tax year allowance.

Or does it not work like that?

This money is to be saved, I have no intention of spending it in the next year, although possibly in the next 3, hence id rather have an ISA type savings, than anything risky.

So can i open a £3000 ISA now, and then top it up with the £1000 after april?

Yes, if you open one today you will get interest in April from 1 Feb until 31 March, then you can add the remainder £1000. This is what I'm doing as I'm getting redundancy soon, buit can only top up my existing Isa with about £800 so I'll add the rest after April 1.

S_C