What to do with £15,000 for 6 months? Please help!

mint

Hi MSExperts!

Please help me find the best way to invest £15,000 for 6 months (from October to March). I am able to borrow this amount for 6 months on my Egg Credit card at 2.5% interest (which is the balance transfer fee).

I am therefore looking for some way to invest the monies so that I can earn enough to pay the 2.5%, plus the income tax, and still be left with something which would make the hassle worthwhile.

An alternative would be a 1 year (or more) investment, but this would mean that at the end of the 6 months I will have to find another card to which I can switch the whole or part of my debt, preferably interest free; otherwise I would be paying another 2.5% or so for the additional 6 months, which means that I would be paying 5% interest per year, and therefore no savings account will be able to beat it.

Actually, borrowing the £15k for 6 months at 2.5% interest means I am in fact borrowing the monies at an annual interest of 5%, doesn't it?

Therefore, is there any kind of safe investment that can beat this rate?

Any of your wise comments and suggestions will be gratefully received.

Thanks,

MnT

Chrismaths

Assuming you are a basic rate taxpayer, you need to generate interest of 6.25% gross to break even. Given that base rates are currently 4.75%, and the highest paying accounts pay in the region of 5-5.5%, you can't generate this level of return without taking risk, so that fails the safe criteria.

If you have the cash, pay it off, it's not worth mucking around - or read Martin's articles on balance transfers to find a longer balance transfer period.

mint

Sad but absolutely True...

Thanks for making it clear(er) for me.

whambamboo

mint wrote:

Sad but absolutely True...

Thanks for making it clear(er) for me.

many credit cards have a maximum on the bt fee. E.g., 2.5% up to £100 max fee.

Have you checked this?