How should my mum invest her money?

shopaholicno1

Hi,
My mum has sold her house and is planning on using what she has left on doing up her new house, but in the mean time needs to invest it somewhere ideally with a good iterest rate. She has around £20000 any ideas would be very much appriciated. Also somewhere that is short notice access to the money is what she needs.
Thank you in advance :-)

Consumerist

Welcome to the forum.

Firstly, mum should pay off any debts she has. Savings will rarely earn a better rate than the cost of loans. See this MSE page for more info

Standard procedure for short-term, risk-free savings is, firstly, to use this year's tax-free cash ISA allowance (£5,100) for up to 3.2% AER. After that an instant-access savings account can get up to about 2.8% AER currently.

Unless mum intends to spend it all in the short term, she might want to consider other longer-term options (e.g. fixed-rate bonds) for some of it. If she is open to some risk, she might want to consider a Stocks & Shares ISA (another £5,100 this year) to hold some funds - there will be insufficient allowance to adequately spread the risk of direct share investment unless she already has a S&S ISA she can add to.

See this MSE page for more advice.

diable

Brazilian Toy Boy? ;o)))

Consumerist

diable wrote: »

Brazilian Toy Boy? ;o)))

Why Brazilian ?

diable

Consumerist wrote: »

Why Brazilian ?

I get 10% ;o))

2108

Hi,

I would open up 3 Lloyds TSB Vantage accounts, and divide the £20,000 between them like this:

Vantage Account 1: £7,000
Vantage Account 2: £7,000
Vantage Account 3: £6,000

With this set up, each account would earn her 4% interest, earning her just over £50/month in total from all 3 accounts. As the vantage is a current account, she can have easy access to her money when she wants without requiring any notice.

Do bear in mind that to get the 4% interest she would need to transfer £1,000 into each account within one calendar month. The easiest way to get over this is to just transfer £1,000 from one of her accounts to another internally between her 3 accounts and she will quality for the 4% interest, i.e:

Transfer £1k from Account 1 to Account 2
Transfer £1k from Account 2 to Account 3
Transfer £1k from Account 3 back to Account 1