£2000

modelreject

Hi,

I have £2000 to invest and unsure where best to do it. I could invest for up to 3 years and want it to be safe so no chance of loosing any money. (Obviously I'd like to make as much money as possible)

I have invested in ISA's in the past but interest rates just seem so bad at the moment. If anyone knows of a good one, please advise.

Thanks in advance for any help.
C

Diffusion

If you don't want any risk, a cash ISA has to be your first port of call. Tax-free savings and your money and your interest are guaranteed up to £50,000 per institution.

You can get a three-year fixed-rate fixed-term cash ISA from Nationwide offering a market-leading 3.75%, earning a guaranteed £233.54 interest over those three years (based upon opening the account with £2,000). Should hopefully be enough that your money keeps pace with inflation, but you won't have access to the money again before September 2013.

edinburgher

If you don't want any risk, a cash ISA has to be your first port of call.

Bang on! No risk = your money needs to be saved as cash.

modelreject

Thanks. Didn't know about that particular ISA rate. Interest rates have really plummeted in the past few years. I used to have a 6% ISA with Halifax. I think it's just because of these times that none of the savings accounts sound appealing, but the one you pointed out sounds about the best.

Thanks again!

snowqueen555

problem is you can only open one per year, otherwise I think 3.75% is the best I can think of

blinko

i would recommend emerging markets unit trust, but you need to be in there 5 years ideally, but as you cansee 4% less tax 3.2% net return pa on savings do you think the stock market will do better than 3.2% pa

this is assuming u havent used up your capital gains and and are a lower rate tax payer etc

modelreject

I do have to pay off a mortgage £105,000. Maybe it would be best to fire the £2000 into that before interest rates sky rocket?

edinburgher

Depends - what's your mortgage rate and are you likely to need the cash for anything else?

If you already have a cash cushion for emergencies and it's beneficial to do so, paying down the mortgage may well be a good investment.

modelreject

Mortgage is tracker and is currently 3.5%. I read that base rate is meant to go up to 8% by 2012 so a bit worried. Maybe best to put money into mortgage, then find another deal in a year which is fixed?

edinburgher

I read that base rate is meant to go up to 8% by 2012 so a bit worried

I'll believe it when I see it As a saver, might actually stand some chance of getting a house if that happens!

spadoosh

if you were to put your money in an 3.75% ISA you would be looking at a return of £39.25 over the 3 years based on current CPI (3.1%)(like for like purchasing power). Hard to say were to put it really, id look more towards the mortgage. Atleast that way you might notice it more in real terms (smaller repayments) £40 over 3 years just isnt really worth it. Either that or go on a really good holiday!?!