70k to invest!

no-i-deer

Need to cover mortgage of £1300 interest and increase capital.
Best so far is 3% tracker from santander. Anyone know anything better.
thanks
no-i

dunstonh

you say invest but then mention as savings account. Do you intend to invest or save?

Is that £1300 p.a. or monthly (I assume p.a. as monthly will be impossible to achieve on savings).

no-i-deer

Intend to save, no risk to capital and must cover at least £1300 otherwise better off paying off mortgage. Also must cover any interest rate rise in the future.
regards
no-i

getzegold

Commodity ETFs or agricultural shares are looking like a good buy (wheat rose by 10% on friday alone) rare earth metals, Oil(if it clears $87) gold and silver miners(HUI is close to breaking resistance and hurtling higher but wait to see if we get a small correction over next 2 weeks) potassium producers, energy companies. I'd steer clear of financial stocks for the mo, the mortgage mess in US could bring the banks much lower which will impact other worldwide financials. Nat gas is very low and we're heading into winter, it too could be a good buy but DYODD

jamesd

With no risk to capital you need either 1.86% from a tax free savings account or that after tax, so 2.33% for basic rate tax or 3.1% with higher rate tax. Those rates are readily available from cash ISAs and term deposit accounts. You'll need to use two places at the moment because the FSCS protection limit is still £50,000 per person, per institution.

The main trouble with those with simple rates is that you will lose money, because they won't both cover the mortgage and grow at inflation or higher. Not really fair because paying off the mortgage also won't grow with inflation.

If you want to try to cover inflation with no risk to capital then there's the National Counties Building Society term deposit account that pays 1.5 times inflation with a five year lock-in. That's before tax but it's still likely that even higher rate tax payers will end up better off. Perhaps useful as part of a mixture.

Santander will pay £100 plus 5% on up to £2500 total in the account. There's also the Lloyds TSB account that pays 4% on balances between £5,000 and £7,000. For these you can just move £500 from account to account with standing orders several times a month to reach the amount that has be be paid in to qualify.

If you were willing to risk capital there are many funds that pay more than that, tax free in a S&S ISA. But their capital value will vary, both up and down. Here's a list sorted by yield (roughly equivalent to interest rate).

The best thing to do is a mixture of all of these things, including putting some capital at risk.

no-i-deer

Many thanks for all replies, have a lot to think about:j