Need advice on what to do with my £££

Trevstonbury_2

Good Afternoon,

You have probably seen these posts a million times but I need some advice on what to do with my money.

Having little knowledge about savings and investments I have no idea where to put my money to get the best return. When I do start to look into things myself I get confused by all the savings & investment buzzwords/slang and mumbo-jumbo, so maybe someone here can help me by giving me some good simple advice and possibly a few suggestions of savings accounts/ISA's etc which may be suitable.

Sooooo.....

Presently I have saved away around about £5000, just sitting in a pretty poor savings account making little interest. I save around £300-500 into this accounts and I will be doing this for the next 18-24 months by which time I am hoping to blow everything saved on a round the world trip of a lifetime, perhaps a bit short-sighted I know but then you only live one :-)

Anyway any advice would be appreciated as long as it doesn’t involve sending my money by post to claim a prize from a competition I’ve never entered ;-)

Regards

Trevor

Lokolo

If you are able to save money each month you should get a regular saver:

http://www.moneysupermarket.com/savings/regular-savings-accounts/

Trevstonbury_2

Thanks Lokolo,

I see there is a limit on £250 on these accounts, would that mean id have to start from scratch and couldn't put all my saving into the account in one go and then start adding money each month?

Trev

Lokolo

Trevstonbury wrote: »

Thanks Lokolo,

I see there is a limit on £250 on these accounts, would that mean id have to start from scratch and couldn't put all my saving into the account in one go and then start adding money each month?

Trev

Nope! And they last 12 months, so when the 12 months is up you get a lump sum which you will have to move around.

With the bulk money you have at the moment you might want to open a fixed term rate account, assuming you won't need access. List here:

http://www.moneysupermarket.com/savings/fixed-rate-bonds/

xrjtg

Trevstonbury wrote: »

I see there is a limit on £250 on these accounts, would that mean id have to start from scratch and couldn't put all my saving into the account in one go and then start adding money each month?

Yes, you'd have to find another home for the lump sum (possibly only temporary whilst you drip-feed it into regular savers). Have a look at Lloyds Vantage (search the forum).

Trevstonbury_2

Thanks for you advice guys.

So my plan is then to open a regular saver account to put my monthly money in and then put my lump sum already saved in a fixed term account.

One question Lokolo, why a fixed rate bond over say a cash ISA will I get better return?

Many thanks

Lokolo

Trevstonbury wrote: »

Thanks for you advice guys.

So my plan is then to open a regular saver account to put my monthly money in and then put my lump sum already saved in a fixed term account.

One question Lokolo, why a fixed rate bond over say a cash ISA will I get better return?

Many thanks

Maybe, maybe not. Fixed bonds are for the "lazy" investor. You won't have to keep moving your money around to get a rate. Fixed Bonds will give you X rate for X term. Instant Access accounts tend to have a declining rate. So over 1 year, the rate will drop from e.g. 3% -> 2% -> 1% -> 0.5%, and you would then need to move the money to get a better rate. Fixed Bonds you know what you are getting over the period.

You can get ISA Fixed Bonds.

http://www.halifax.co.uk/savings/fixed-rate-isa.asp

Example here.

However, fixed bonds usually only allow one deposit. So if you have £4000, and you open a fixed rate ISA (say example above, the Halifax one), you are not using the whole of your allowance (as this is £5,100).

Baldur

Trevstonbury wrote: »

I see there is a limit on £250 on these accounts....

Not true of all regular savings accounts, I recently opened the 4% one with Principality which permits funding of £20 to £500 per month.

Jake'sGran

xrjtg wrote: »

Yes, you'd have to find another home for the lump sum (possibly only temporary whilst you drip-feed it into regular savers). Have a look at Lloyds Vantage (search the forum).

Did you mean the Lloyds Classic with Vantage?
To make the best of this account you need to have £7000 in it to obtain 4% interest but only if you put £1000 in each month... so...most savers who are onto this one have three of these accounts - this is supposed to be the maximum number - and they do a standing order on each account to take £1k out and put it in another one of the three.
In fact, Lloyds even help you to organise it.

I just realised you are talking about £5000 so it would not work for you. I don't like regular savers simply because a lot of people who have used them don't realise how little interest they will get at the end.

The best thing to do is use a fixed rate although you cannot have access to your money. I have just done one with the Stroud & Swindon who are paying 3.7% until 31.12.2012.

I am a great fan of a famous fund manager i.e. Anthony Bolton of Fidelity. He has a new fund, China Special Situations and last time I looked it was doing very well indeed.

xrjtg

Yes, Classic with Vantage is what they actually call the account. Perhaps we should mention that more often! They pay the top rate of interest on balances between £5000 and £7000, so it could be the best choice for the OP if they're prepared to do the necessary dancing around.