How best to invest £20K

ebs1980

Hi
I have £20K that i need to work harder for me. I've already done my ISA for the year.

I was thinking about putting it in a 2yr bond account as I don't intend to need to be able to access it.

What advice would you give me as to what to do with it? It's currently just sitting in a lloyds e-savings account.

Thanks

Newbie2saving

Open (online) a few Lloyds Classic accounts and add Vantage onto them. The account pays 4%aer (if you have a balance of between £5-7k) if you transfer £1k in per month. You don't have to leave the £1k in, just transfer it into Acc 1 > 2 > 3 then out to your source account. It's the best around in terms of savings.

diable

Having a good time but thats me and not maybe what you want ;o)))

ebs1980

Thanks, what exactly is Vantage?

I have my current account with Lloyds already.

Newbie2saving

Already having an online account should make it easy for you to open the Classic account. You open a current account and then add on Vantage at the end. Vantage is just the name http://www.lloydstsb.com/current_accounts/vantage.asp?WT.mc_id=43000000130590046&WT.srch=1 There are a number of threads on this board if you do a search. You may have to open one at a time, wait for approval and then open the next. The key is remembering to transfer your 1k otherwise the interest won't be paid, you can always set this up or do it manually.

ChrisEvanson

Depends on your attitude to risk to be honest. I am starting to do something I have dreamed about for years (sad I know!) and dabble in shares. If I had £20k spare I'd be tempted to put at least half of that into shares. BUT I am also reading up a lot, researching and watching many shares, taking advice and reading books on it. So it is only for those who go in with their eyes open to the pitfalls and study the form!

Cautious_Investor_3

Hi

All of the solutions so far have been 'products' you need to ask some more fundemental questions before you get to 'product' stage:

1. How long do you want to invest for
2. How much risk are you prepared to take, for example on a scale of 1 - 5 or 1 - 10
3. What other assets do you have? Is this your only £20k?, if so you might want to keep something back for emergencies
4. What experience of investing do you have?
5. What's your tax position?
6. Are you saving for something in particular?

All of these questions need to be answered before you can decide where to invest.

For example, you may be very inexperienced, need the money in two years, have no other cash and a low attitude to risk, in which case a deposit account (which the Vanatage account is one example of) may be an attractive solution.

However, you may wish to invest for five years, have a high tolerance for risk and have other money set aside for emergencies, in which case direct shares may be an option to look at.

Always think about the 6 questions (plus others) I have outlined above before you start to think of 'prodcut'.

I hope this helps.

The Cautious Investor

Cautious_Investor_3

mrb1 wrote: »

You could allways buy some premium bonds as well, I had approx £3000.00 in them and over 1 year won approx £400.00, this is not to say you will win but the money is 100% safe and also you do have a chance of a win !

You did well, the average return on these is very poor, well below inflation and well below other deposit accounts.

The Cautious Investor

ChrisEvanson

Check the statistics on premium bonds. Ok so while interest rates are low they seem attractive but when you look at the odds of winning it tends to put you off. Again though it does depend on your attitude. I'm aggressively working on making my money work harder for me so am achieving good growth but at theoretically higher risk. However once you get to good growth you simply have to be ready to pull your money out if things start to slide rather than watch it drop. This is where a lot if shareholders get it wrong.

adonis10

If you open a Santander home saver account you'll get 5%. You can put 5k in to start then £25-300/month but you could put the other 15k in in month 2, take the interest rate penalty (0.1% insread of 5%) in that month and benefit from the 5% interest on the whole lot after that.

You have to be under 35 and meet the criteria of a first time buyer (don't have to be, just pretend you are to benefit from the 5%).

ChrisEvanson

I'd avoid Santander like the plague personally but each to their own