Best Short Term Investment

DawnCBUk

Hi all,

I've got a fixed rate bond of £7500 maturing in the next week and have an additional £2500-5000 to invest giving me a total possible of £12500.

I'm topped up on my ISAS. I've got 2 or 3 regular savers at a pretty respectable 3-4% also maturing next year

I need to have access to it during the 2nd half of 2010 and wanted to ask where people are seeing the best rate of return on short term investments?

I am concerned in particular with the interest rates rising in January so don't want to lock away money at a crappy 3% when I could get 4(!) if I wait a month or two.

What's the feeling at the moment for the best place to invest?

Thanks

Dawn

dunstonh

investing for the short term is riskier than investing for the long term. As you need to access the money in 2010 you should stick to savings accounts.

Take a look at the interest rate charts on the site for the rate that matches your timescale.

G_M

As dunstonh says, investing (ie putting money into the stock market directly or indirectly) is a longer-term activity. Stick to saving (ie bank accounts).

See Moneyfacts here, or Martin's recommendations here, or search this forum's threads.

DiggerUK

DawnCBUk,

You have a mortgage at 4.75% net. To earn that interest you have to pay income tax.
If you could get that in a savings A/C you would be a happy bunny.

You need to pay as much as possible off your mortgage, rates will not be coming down, if your in studies at the same time as rates bounce, result unhappiness.

Hold back enough for a Cash ISA in April, the funds in your ISA's will give you rainy day funds.
Have a break away, then wack what's left off your mortgage.

Best of fortune.

Jonbvn

DiggerUK wrote: »

You have a mortgage at 4.75% net. To earn that interest you have to pay income tax. If you could get that in a savings A/C you would be a happy bunny.

You need to pay as much as possible off your mortgage, rates will not be coming down, if your in studies at the same time as rates bounce, result unhappiness.

Hold back enough for a Cash ISA in April, the funds in your ISA's will give you rainy day funds.

Have a break away, then wack what's left off your mortgage.

Best of fortune.

Wow,

I'm pretty much in agreement with Digger on this;)

Remember OP that the cash ISA limit will increase to £5.1k in just over 3 months time. The rest of your spare money should be targeted at your mortgage. To "beat" your mortgage a savings account would have to pay 5.9375% AER gross, assuming you are a basic rate tax-payer. AFAIK, not even the 5-year fixes are paying that much.