Really confused and clueless !!

CarpeDiem

I have read and read stuff online and have to say I really struggle to understand this finance stuff Im a career woman ask me law - business etc and I can usually answer it BUT for some reason money stuff may as well be in chinese !!

I have just taken £10,000 nest egg out of premium bonds and need advice what to do with it - I only want to tie it up for 12 months initially - I have no intention of using it BUT I need it as a security blanket in case of emergency...

Would I be better with a Guaranted Reserve account (Halifax) OR would I be better getting an ISA each for myself and my husband...

Any advice would be greatly appreciated :T

G_M

ISA limit is £3600 each per year. Compare here or see Teachers BS (3% tax free) easy access.

Guaranted Reserve account (Halifax) - well 3.5% with limited access for a year is not great. You can get near that with instant access. (eg Leeds BS on-line)

Why not stick with premium bonds? OK not great returns, but accessable as a security blanket, and there's always the chance of £1m !

Lokolo

I think she took the £10k out of PBs for a reason...

ISAs give you tax free interest, so pretty useful in that respect... but yeh limit of £3,600 for each tax year per person. But between 2 of you that £7,200 done.

Find a higher rate ISA. Both open one, stick the full £3,600 in each.

With the rest, stick it in a 1 year fixed maybe?

- http://forums.moneysavingexpert.com/showpost.html?p=4603369&postcount=1 - for best ISA rates.
- http://www.fsa.gov.uk/tables/bespoke/SavingsAccount - fill in the form and let that do the rest for normal savings rate (or ISAs too if you want!)

JoeCrystal

And do not forget about National Savings & Investments Savings Certificates which are tax free. :j Of course, the interest rate is bad but nothing than nothing.

G_M

I think she took the £10k out of PBs for a reason...

Well maybe.... but being confused and clueless (her words not mine!), and having done so without first planning what to do next, perhaps the easiest/best thing is just to put it back.....

Reaper

You ought to get an ISA for both your husband and yourself. Then put the rest away.

Since you have no particular plans for it I'd reccomend the Newcastle 5 year saver for both the ISA ans the rest. Don't be put off by the 5 year bit that just means the interest rate is fixed at 5% for 5 years, you can still withdraw it at any time provided you give them 90 days notice.

Provided of course 90 days is not too long to get access. It means you have to plan ahead a bit.

CarpeDiem

I took them out because up until 2 years ago I was getting minimum winnings of £300+ per year along with the chance of a biggie win BUT in the last 12 months I have had 1 win of £25 - thought it time for a change.

As for not thinking about what to do next - I havent actually got the cash out yet as I left it until after the monthly draw (2nd) and have been trying to understand some of the financial jargon - putting my post on was my last attempt at anything before deciding - so I have thought about what to do next it was in the timing.

Thanks to everyone who answered my post I really appreciate it.

C

clairbear_3

If you have any DEBTS(credit cards,loans,mortgage etc) it may be wise to pay this off,as undoubtably its at a higher rate than any savings rate

dancingfairy

Although obviously if it's payed off the mortgage or loan you then would not have access to the money in an emergency but it might be worth thinking about any credit cards / overdrafts as Clairbear says.
df

m5rcc

A&L now pay 3.15% on their no-notice instant saver