what would you do with £3,000?????

rizla01

If you have time AND money on your hands you can enjoy yourself by buying some items and selling them at a profit.

There are many Cos that will supply at good prices things that you may have a personal interest in which you would find very easy to sell on.

Only use 1/5th of your funds each time and you will not go wrong!

PS I have my final endowment paying out in January and I too will have a spare £3000.00 but I 've already spent mine.

meanmachine_2

You could invest in gold, or in raw materials - although both of these are in bubble mode right now.

The lottery isn't high risk, it's suicidal.

Premium bonds are a waste of time for such a small investment. 24K is the minimum on that front.

I'd look at a managed fund, invest the money as a mini equity isa then forget about it. I think they send you an update every six months.

Bear in mind though that there is often an upfront fee. I know some banks like Nationwide waive this, but I suspect their funds are pretty dull and low risk.I wouldn't invest in a FTSE tracker. I suspect 6000 is the max for this year.

But who knows? That's part of the fun - you don't know where it's going to go, so enjoy the ride.

I do know one thing - sticking the money in the bank is boring as hell.

Paul_Herring

maforduk wrote:

el-dog wrote:

I'll have some of that but where's this 10% savings account for a lump sum???

Alliance & Leicester or
Barclays - (Requires your wages to be paid in as part of the agreement for 10% though)

You're either not reading the question properly (twice!) or you don't understand how the accounts you're mentioning work.

Those accounts only allow you to pay in a limited amount per month (£10-£250). Neither allow you to deposit £3000 and leave it there for a year.

Debt_Free_Chick

Paul_Herring wrote:

You're either not reading the question properly (twice!) or you don't understand how the accounts you're mentioning work.

Those accounts only allow you to pay in a limited amount per month (£10-£250). Neither allow you to deposit £3000 and leave it there for a year.

And just to spell this out .. using a 10% rate, as an example.
You don't get 10% on £3,000 - you only get 10% (the full year's interest) on the amount you deposit in month 1. For the amount you deposit in month 2, you get 11/12 of 10% and then in month 3, 10/12 of 10% ..... Overall, if you deposit the same amount every month, the total interest on the amount deposited over the year is about half the headline rate. In my example, 5%. So these accounts are actually no better than one that offers a rate of 5% up-front, but allows you to deposit the whole year's savings on day one.

Of course, if you can only save monthly then you neither lose or gain. But if you're looking to deposit a lump sum, then you need to understand that these "top" rates offered on a regular savings account are not what they seem.

Paul_Herring

Debt_Free_Chick wrote:

And just to spell this out .. using a 10% rate, as an example.
You don't get 10% on £3,000 - you only get 10% (the full year's interest) on the amount you deposit in month 1. For the amount you deposit in month 2, you get 11/12 of 10% and then in month 3, 10/12 of 10% ..... Overall, if you deposit the same amount every month, the total interest on the amount deposited over the year is about half the headline rate. In my example, 5%. So these accounts are actually no better than one that offers a rate of 5% up-front, but allows you to deposit the whole year's savings on day one.

But use the 5% account to fund the 10% account, and you can get and AER of around 7.7%:

				10.00%			5%
2006-01-01	£250.00			£2,750.00
2006-02-01	£500.00		£2.12	£2,500.00	£11.68
2006-03-01	£750.00		£3.84	£2,250.00	£9.59
2006-04-01	£1,000.00	£6.37	£2,000.00	£9.55
2006-05-01	£1,250.00	£8.22	£1,750.00	£8.22
2006-06-01	£1,500.00	£10.62	£1,500.00	£7.43
2006-07-01	£1,750.00	£12.33	£1,250.00	£6.16
2006-08-01	£2,000.00	£14.86	£1,000.00	£5.31
2006-09-01	£2,250.00	£16.99	£750.00		£4.25
2006-10-01	£2,500.00	£18.49	£500.00		£3.08
2006-11-01	£2,750.00	£21.23	£250.00		£2.12
2006-12-01	£3,000.00	£22.60	£0.00		£1.03
2007-01-01			£25.48			£0.00
Account interest		£163.15			£68.42
Total interest		£231.57		7.72%

el-dog

Paul_Herring - But use the 5% account to fund the 10% account, and you can get and AER of around 7.7%:

Very clever!! - and thanks for sorting the 10% issue.

El-Dog

Paul_Herring

el-dog wrote:

Very clever!!

I can't claim to be the originator of the idea - Martin covers it in http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1108401263,93536, - the How to Invest a Lump Sum and Correcting a Myth sections. I merely put some numbers in a spreadsheet and fought with the board software to make it look pretty...

EdInvestor

fought with the board software to make it look pretty...

Well done PH. :T How did you do that? I didn't know you could get the VB to do formatting. Please reveal the secret.

Paul_Herring

EdInvestor wrote:

Well done PH. :T How did you do that? I didn't know you could get the VB to do formatting. Please reveal the secret.

Took me a while to figure it out, but all you need are tabs (one tab = 8 spaces) and the [code] tag. If you can format it correctly in Notepad using tabs, just copy/paste between the code tags.

EdInvestor

Thanks. I'll give it a try.