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Lump Sum Investment

Hi

All the threads I can see relate to regular savings accounts which isn't what I'm after (I think!).

If I had 30k, wanted it to be invested somewhere relatively safe with the best rates of interest I could get, and I only needed to draw from it once a year (to skim the interest off the top to pay some bills) where would be the best place to put it.

Was hoping to pay it off the mortgage but the !!!!!!s won't let me without penalties!

Can anyone offer me any advice or point me to a thread or Martin article which has already dealt with this type of question.

Many thanks!

Al

Comments

  • dunstonh
    dunstonh Posts: 120,207 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    If I had 30k, wanted it to be invested somewhere relatively safe with the best rates of interest I could get, and I only needed to draw from it once a year (to skim the interest off the top to pay some bills) where would be the best place to put it.

    The fact you mention interest rates does mean you are referring to regular savings accounts and not investments. Investments are not deposit backed and do not pay interest. Whilst there are many investments that could prove suitable, it would depend on what you risk, tax, timescales, aims, goals etc you have to what would be best.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • alunp
    alunp Posts: 105 Forumite
    I should point out that I'm a non taxpayer, but my wife is a taxpayer.
  • alunp
    alunp Posts: 105 Forumite
    dunstonh wrote:
    The fact you mention interest rates does mean you are referring to regular savings accounts and not investments. Investments are not deposit backed and do not pay interest. Whilst there are many investments that could prove suitable, it would depend on what you risk, tax, timescales, aims, goals etc you have to what would be best.

    Yes I'm after a savings account but I'd rather just park the lump sum somewhere rather than have to be paying something in regularly if that makes sense.

    So you're right, I'm not looking to risk the money, but I am looking for the best place where I can park the money and skim off the interest at the end of each 12 months to pay some bills.

    Al
  • alunp
    alunp Posts: 105 Forumite
    alunp wrote:
    Yes I'm after a savings account but I'd rather just park the lump sum somewhere rather than have to be paying something in regularly if that makes sense.

    So you're right, I'm not looking to risk the money, but I am looking for the best place where I can park the money and skim off the interest at the end of each 12 months to pay some bills.

    Al

    Anything that matches 6.29% would be perfect as thats what my fixed and not very flexible mortgage is at.
  • alunp
    alunp Posts: 105 Forumite
    Just wondering. Is there a financial difference between skimming off the interest month by month as opposed to once a year?
  • cheerfulcat
    cheerfulcat Posts: 3,406 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Yes; you lose some of the compounding effect.
    Anything that matches 6.29% would be perfect
    No chance. At least, not in a deposit account.

    You can compare accounts here, btw. Frequently the term accounts have the best interest rates.

    HTH

    Cheerfulcat
  • alunp
    alunp Posts: 105 Forumite
    With regular savings accs, what happens when you hit the financial limit. Do they keep paying at the higher rate even tho theres no more money coming in?
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