£15000 to invest

ukbandit

ok,

i have 15,000 to invest.

im looking at getting some work done in the house, but am not planning on rushing into it.

it means that i could be sitting on this for up to and possibly beyond 6 months.

I've been trying to think about whether to chuck £6000 in ISAs for this and next finaincial year (me and the wife{) or put it into a savings account (as i'm unlikely to leave it a year..!)

any advice?

cadboll

Hi

Its not worth putting into an ISA if you are wanting access to the money before the year is up. As 3k is the max you can put into an individual ISA account, if you withdraw any amount, e.g. 2k, then your ISA allowance drops to 1k. For that reason alone, its probably best not put money into the ISA account.

Other options would be to use an Internet Savings Account. There are a number of options:
(i) First Direct - their account is 5% Gross/AER but it does not pay interest on the month you withdraw the money, ideal if you want it to sit for a while.
(ii) Cahoot - they have an internet account with a rate of 4.85 Gross/AER, I think it is monthly interest as well.

It depends on your budget but it might be worth considering putting 3k into an ISA and the remainder into an e-savings account.

Hope this helps.

Debt_Free_Chick

Assuming you are both tax payers, then you'll get the interest paid tax free within an ISA. However, whether or not this is "worth it" depends on how long the money is actually in the accounts. £15,000 over 6 months at 5% would give you approx £375 ... is it worth it?

One thing to bear in mind is that you will effectively lose your ISA allowance for both years i.e. you will have put in the maximum and then can't save in a cash mini-ISA until 2007/2008.

One of the reasons many of us use a cash mini-ISA is that the interest is paid tax-free for the foreseeable future (until GB or his successor removes them!). But for so long as they are tax-free, you get the compounding effect of tax-free interest on top of the tax-free interest paid in earlier years. For long term savings, this is a real bonus.

For comparison, if you had a non-ISA account also paying 5% then you would receive about £300 interest net of BR tax and if you are higher rate taxpayers, you would each have a further liability for approx £34 tax, which you would have to pay in 2007/2008 after you've submitted your tax return.

So ... an ISA = approx £375 interest
A non-ISA = approx £300 interest, if you pay BR tax and approx £225 interest if you are both higher rate taxpayers.

HTH

ukbandit

hmmmm..

i think i undertand what your saying.

ISAs are best left to more permanent/longer term investments?

there is the barclays savings account with 10% if left in for the year.
http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?site=pfs&task=homefreegroup&value=9234&target=_self

but only if you leave it in.

I think i would be better with putting it all in cahoot (i have cahoot current accoutn already) and then saving some of the money in a longer term solution, maybe next years ISA - seems little point in this years one if i go and get teh money out again!

thanks
for the help, i'll elt you know what i (finally) decide, in the meantime, and other suggestions welcome!

trumbo

I think the barclays one requires you to have a current account with them which has to have £1000 through it every month?

Also you can only put in £250 a month max.... not lump sums....

I stand to be corrected though.....