Where best to invest 200K

rizla01

Looking to put all of my savings into somewhere that'll earn good interest.
prefer to split the amount 50-50. (Instant Access + 30 - 90 day account)

Where would you advise for the best returns.

I am a non tax payer and mortgage free.

lush_walrus

rizla01 wrote:

Looking to put all of my savings into somewhere that'll earn good interest.
prefer to split the amount 50-50. (Instant Access + 30 - 90 day account)

Where would you advise for the best returns.

I am a non tax payer and mortgage free.

Just to let you know, that if you do save that amount of money in a saving account, you will need to pay tax on the interest, as the interest alone will go over the personal allowance for tax. Just thought I would mention it as you say you want to invest but then mention interest, which you only get from saving, not investing.

It might influence your decision knowing that!

Chrismaths

Not any more. @5% interest you'll have £10,000 per year of gross income. Therefore you are a taxpayer.

Just a quick point - invest usually means "take some risk to achieve higher returns than cash", you are saving.

dunstonh

..hence the usual do you mean invest or do you mean save when you have indicated both? - in this case save looks like the option.

£200k is a lot of money to stick on deposit and watch it waste away with inflation.

rizla01

Thanks for the advice re paying tax. Didn't know that.

Well I want it to keep ahead of inflation and hopefully give me some spending money.

I will need it later for a project costing about 160k in March.

I suppose Premium Bonds would be the best bet for some of my funds. would you agree? If so how much should I invest and where is best at this time?

hot_chick_2

If you are going to take the money out of what ever savings account you choose by next april, you will only have made 5 months interest so may not pay tax depending on your other income.

At say 5.0% interest on £200000 over 5 months you would have made about £4167 before tax.

Chrismaths

As an investment, premium bonds are appalling. If you want them for the off chance that you'll win one of the big prizes, that's up to you. But you won't. If you are spending the money in March, just stick it in a high interest savings account.

dancingfairy

Check out Martin Article currently on the home page about Premium Bonds. I'm sure you/we can come up with something better than that.

For such a short time period I presume you want to save (ie be guaranteed you money back plus some interest) rather than invest - possibly risk some of the capital in the hope of growth. Therefore you would probably want to put the first £3,000 in a mini cash ISA and then put the rest into regular savings accounts/ savings accounts etc.

nrsql

With premium bonds they have to be bought for a calendar month before they are entered in a draw. So at the moment the earliest would be Jan with a months lost "interest". If you will need the money in march it doesn't look worth it unless you expect to be lucky.

Where is the money at the moment?
If in a bank account then open an interenet savings account with them and move it there - probably the fastest you can do. While that's going on do the other things.