20k to save where to start

mundu

My mum has just recieved about 20k and wants to save it but has no idea where to start.

She doest need quick access to the money and is on a disability living allowence and incapacity benifit.

I'm 18 and in full time education as is my 17 year old sister.

Thanks in advance

deemy2004

If her benefits are means tested then their is alikelyhood her benefits will be reduced.

Thus she could gift the money to you, or your sister.

There are many accounts available > 5% with near instance acces such as egg.com

mundu

There not means tested she used to have one that was which was replaced.

Walletwatch

If she doesn't need quick access to the money, then putting the whole amount in an egg savings account with regular transfers to a set of regular savers for a year is the best bet for the next twelve months....

Open a regular saver with Halifax @ 7% AER for the max amount (£250 per month), Abbey @ 7% AER (max £500 per month) and Derbyshire @ 5.85%AER for say, £750 per month, and arrange to fund all these amounts from the egg savings account (5.5% per month for the first six months, and 4.75% or the prevelant Bank of England rate thereafter)

Admittedly, it involves some admin involvement in terms of the management of these accounts, but that is how you can derive max possible interest for the amount you have in mind...

mundu

Thanks alot. She was about to put it all in an abbey account and even though it's going to takea bit of time she'll probally go the way of the better intrest thanks.

Fatboy_NSS

She should be able to do better investing the money rather than leaving it on deposit. And I wouldn't have thought you could set up standing orders from an Egg account, so that rules out the Abbey FRMS and probably the other regular savings accounts.

Walletwatch

She should be able to do better investing the money rather than leaving it on deposit.  And I wouldn't have thought you could set up standing orders from an Egg account, so that rules out the Abbey FRMS and probably the other regular savings accounts.

Investing instead of saving depends to a great extent on the risk appetite of the investor and this is not clear from the original post. Also, given the amount, I am not comfortable recommending the poster to invest the whole amount, and the amount being on the lower side, it may not make much sense splitting the same between a savings account and the stock market.

Refer other posts under this section for details on setting up standing orders from savings accounts.

bowf

Open a regular saver with Halifax @ 7% AER for the max amount (£250 per month), Abbey @ 7% AER (max £500 per month) and Derbyshire @ 5.85%AER for say, £750 per month, and arrange to fund all these amounts from the egg savings account (5.5% per month for the first six months, and 4.75% or the prevelant Bank of England rate thereafter)

We also have 20K+ to invest.
I'm willing to set something like the above up.
However,what happens when you run out of money to transfer ?
Once we have transferred the full 20K+ we will not have anything spare left a month to keep transfers going,so would they throw a hissy-fit and close the accounts ?

???

Walletwatch

You can source the regular inflows into the Regular Savings accounts from your savings account, as and when the payments are due. To illustrate, put in the whole amount into egg, and say your regular inflows into Abbey and Hfx are due on, say, the tenth of every month, set up standing orders for these transfers from the savings account into the Regular savers.

bowf

Sorry,I don't fully understand.
Say I do open two accounts,investing £500 a month into one of them and £750 a month into the other.
So that's £1250 a month.
So our £24000 is only going to sustain 19 months of transfers before running out.
What does one do then ?
Presumably each account relies on regular 'income' so what do they do/say when the 'income' suddenly stops in 19 months ?
???

Walletwatch

Apologies for being abrupt on my last response. The Abbey and Halifax regular savers last for a year, which means that you are allowed twelve monthly deposits not exceeding £250 for Hfx and £500 for Abbey per month. This totals £9000 (actually Abbey allows you an initial deposit of £500, and does not count this as part of the twelve deposits, so Abbey would allow you a max of thirteen deposits)

This accounts for £9500 of your kitty. The rest of the amount can be put into Derbyshire again @ a max of £1000 per month. I don't think the Derbyshire account has a cap on the time period (no of instalments), but I may be wrong, and it is best looked
up at their website.

Hope that helped.