Advice - what account? maximum interest on £10,000

Mitch101_2

I have £10,000 which I want to put in an account to recieve maximum interest. I'm happy to not touch it for a year (maybe longer, but that's all i can definitely commit to). Please help me - I am a financial novice! Thank you

dunstonh

You say you are low risk so you ought to stick to savings accounts rather than invest.

ard123en

i agree with the above plus I consider my investments to be long term a year is way to short a term

the money ive got in shares isas will not be required for at least 10 years :eek:
at least i hope not.

you should not If it can be avoided been in the position of "having" to convert shares to money but pick a time when the market is right for you

thats my thoughts someone will prob disagree with me later

Thenotsowyzewun

You'd make about £500 in a savings account, not as great as it sounds though because prices rise along with inflation. (which is at 4.5% I think) so you're only getting 1% more spending power in reality.
Investing on the stock market incurs lots of fees which'll quickly eat away at the performance of whatever solid stocks you pick up (I'm guessing you're not going to invest in the higher risk stocks where the money can be made, and rightly so (it's risky, sometimes companies aren't successful and you lose your money).
Still, I heard on the radio some guy's bet £150000 on england winning the world cup, I know its a lot of money to lose but he'll make profit about £900000 if his strong hunch (I'm guessing that's what it is) is right!

equitydealer

I think inflation is running at around 2% rather than 4.5%, at least I hope so

Paul_Herring

equitydealer wrote:

I think inflation is running at around 2% rather than 4.5%, at least I hope so

Now would that be the Government's imaginary figure for inflation or the real one affecting people who pay inflating gas/electric/petrol/council tax of more than 2% these days?

Hereward

Paul_Herring wrote:

Now would that be the Government's imaginary figure for inflation or the real one affecting people who pay inflating gas/electric/petrol/council tax of more than 2% these days?

Assume that the average household pays £1000 per year for gas and electricity and spends £50 per week (£2500 a year) on food. If we are to believe the supermarkets claims that they are consistently cutting prices, we can assume that food cost will fall by 5%. Looking at the current energy markets, energy is increasing by approximately 20%.

As food expenditure is greater than energy expenditure then we can expect that the inflationary (or deflationary) pressures on this commodity to be greater; therefore inflation is running at less than the 20%: in this example it would inflation would equate to 1.9%. This is a very simple explanation of economy, the one in Britain is much more complicated, and therefore there will be more factors in play, but the example is a good approximation.

Paul_Herring

Hereward wrote:

Assume that the average household pays £1000 per year for gas and electricity and spends £50 per week (£2500 a year) on food. If we are to believe the supermarkets claims that they are consistently cutting prices, we can assume that food cost will fall by 5%. Looking at the current energy markets, energy is increasing by approximately 20%.

As food expenditure is greater than energy expenditure then we can expect that the inflationary (or deflationary) pressures on this commodity to be greater; therefore inflation is running at less than the 20%: in this example it would inflation would equate to 1.9%. This is a very simple explanation of economy, the one in Britain is much more complicated, and therefore there will be more factors in play, but the example is a good approximation.

I beleive your calculations to be wrong. Accepting your assumptions (for the moment - I find them highly optimistic)

Energy: £1000*1.20 = £1200
Groceries: £2500*0.95 = £2375
Year 1 to year 2: £3500->£3575 = 2.14%

Hereward

Paul_Herring wrote:

I beleive your calculations to be wrong. Accepting your assumptions (for the moment - I find them highly optimistic)

Energy: £1000*1.20 = £1200
Groceries: £2500*0.95 = £2375
Year 1 to year 2: £3500->£3575 = 2.14%

Apologies to the OP for high-jacking their post. If you increase my assumptions to say £150 per month for energy and 100 per week for food, this gives you £1800 pa for energy and £5200 pa for food. (my original statement saying £2500 for food was wrong it should have read £2600 [50 * 52]). Reducing the savings on food to 2.5% and increasing the cost of energy to 25% gives:

Energy: 150 * 12 * 1.25 = 1800 * 1.25 = 2250
Food: 100 * 52 * 0.975 = 5200 * 0.975 = 5070
Year 1 Spend = 7000
Year 2 Spend = 7320
Inflation = (7000 / 7320) - 1 = 4.57%

As I said originally this is a very simple economy with only two commodities (energy and food). The real one has 000's of commodities, and is therefore far more complex.