What's the best thing to do with £3500 for 12 months

suedenim_2

Hi all,

1st time poster here, so be gentle

Getting married next October and husband to be and I plan to go travelling for 6 months immediately after the wedding. So we need to save save save!!

We have been given an early wedding gift from a grandparent and I need some advice on how best to stash it away, making maximum interest or return.

I have no idea about stocks and shares, is it worth buying something and selling in 12 months or would an ISA be better, if so, fixed rate or variable?

Any pointers would be greatly appreciated!!

ray123

I would advise against investing in the stock market, which is very unpredictable at the best of times.

Your best option would be to invest it in a 1 year fixed rate bond or ISA, therefore, you will not have access to the money for that period and you will be guarenteed a fixed rate of interest.

For example, Nationwide are currently offering 1 Year Fixed Rate ISA Bond at 3% interest.

http://www.nationwide.co.uk/savings/cash_isa/cash-isa.htm

isofa

Lock it away for a year with a fixed rate account ("bond"), best rates are 3.8% at the moment, list is here: http://www.moneyfacts.co.uk/money/savings/1/short-term-fixed-rate-bonds.aspx

Don't dabble with the stock market for such a small amount of time.

If you haven't used your cash ISA allowance, use that first (in the best rate you can find), then the rest in a fixed rate/term account.

suedenim_2

Thanks for the advice!

I will do some ISA research.

I have read that it can be beneficial to feed into regular savings accounts with higher interest rates, but i understand that these interest rates will be taxed.

Is it worthwhile considering drip feeding into a 5% account over a fixed rate 3% ISA?

Baldur

Check out the Regular Savings Calculator to compare achievable interest.