Savings account or investing large amount Q ?

JonnyRaz

Hello, i am 20 & i am soon to be selling the house i inherited from my mother for around £135,000 as it needs to much work for me to take on. But i know very little about finance & where it would be best for me to put this amount of money so that i get the best level of interest possible. I am going to be living in a flat & i would like to know how much interest i can make on my money monthly/yearly before i decide how much rent i can afford monthly/yearly. Id obviously like to be paying for it with interest as much as possible. I dont know whether i should be investing this money, or putting it into a savings account. Or which savings account would be best for my situation if thats the right road to go down.

Ive tried searching through different kinds of savings accounts. But most of the advice ive read is based on paying a certain amount in each year etc...and isnt applicable to my situation ?

Can anyone offer me any advice?

Thankyou

lizzielondon

there are savings accounts available without paying a certain amount in each month as long as you have a substantial lump sum however the interest rates on them are awful at the mo (Natwest min input £10,000 0.9% monthly interest :eek:)

have you thought of selling the house and using the capital to buy a property to live in yourself? depending on where you live in the country it may be better the wait if your local housing market is expected to fall a lot further

If I were you, depending on demand for family houses in the local rental market i'd employ a property managing company to rent out the house for you, and then you can use the rental income to rent out your own place until the market stabilises and interest rates on savings acccounts improve- the pm company will take a small % of the rent but it means no hassel for you, all repairs, outstanding rent etc issues will be dealt with by them

JonnyRaz

Hi thanks for replying

I would do that but the house isnt in any state to be rented out atm. For a while ive been trying to do it up to get it into a good enough condition, but its just to much work & i dont have the experience or contacts to be able to sort it out on my own. Most of the workers ive had in seem to be looking to make as much as possible, so its hard to trust any advice from them lol

Buying into another property is something ill have to consider. Not sure if id get anywhere decent for 130 grand though ?

Is that the only savings account which accept big lump sums ?

I'd like to look into investing...as i dont necessarily need the money straight away. Just want to make it as profitable as possible...so im not just cutting into savings renting out a place & can balance out what ive spent in the future somehow. But dont know anything about it again. Be useful if someone could offer some advice on that.

Should i look into bonds, shares...someone mentioned certificates of deposits you can get with banks ?

G_M

Most savings accounts will allow large deposits. When you choose one, read the terms & conditions or ask the bank before opening it to check.

However to keep your money totally safe don't put more than £50K into any one bank - and to check which bank owns which (to avoid going over the 50K) see here.

To compare savings accounts, see here. You can get 3% + at the moment. You might want to consider putting some into an ISA account (it's tax-free), though you'd be limited to £3,600 each year.

You really need to decide how long you plan to keep the money for (ie might you buy a property in 6 months? a year?). Depending on the answer you could look at fixed rate savings accounts (though rates are not really better than easy access), or bonds, or perhaps shares/stock market via unit trusts. If so, don't put it all in one place though.