Best saving option for £20k

mikeyw

Hi,

I've won and lost some decent money on the stock market in the past but have £20K that i keep as my safety net money.

At the moment it's just sat in my current count earning very little.

I don't really want to tie it up in ISA's and premium bonds seem to return little unless you get lucky.

So really i'm just looking at the 2.9% post office savings account which gives me quick access should i ever need the money.

Are there other options I should consider ?

In hindsight dropping it on the oversold BP was as safe as houses but didn't have the nerve at the time to do it.

Thanks in advance

M

PParka

Hi,

With £20k you could open 3 Lloyds Vantage accounts and put £7k in the first, £7k in the second and £6k in the third.
Each would recieve 4% interest. They are current accounts so you will still have easy access to the money.

Search for Lloyds Vantage on this forum and see what you think.

Wobblydeb

If you've not already used up your limit this year, you could look into cash ISAs. You don't have to be tied in to a cash ISA - you can get instant access versions.

Not sure if you will be able to find one that beats the Lloyds Vantage accounts mentioned above though.... depends on what tax rate you pay.

Loughton_Monkey

mikeyw wrote: »

Are there other options I should consider ?

There are many, many options. But the tone of your question implies you maybe thinking about it (possibly) the wrong way round. i.e. you seem to be zooming in on specifics and then deciding whether or not you like it.

For example, I can think of virtually no greater "extremes" than having £20K sat in a current account, and someone else putting £20K entirely into a single company share! These are truly at different ends of any reasonable solution.

Your wish not to 'tie it up' in an ISA doesn't really make sense. ISA's do not tie you in any more, or less, than any other form of saving or investment. All they do is change the tax position. So ruling ISA's out seems a trifle illogical.

If I were you, I would go back to the drawing board.

Think firstly about do you want to save it, or invest it. Or a mixture. Because they are truly two different things. After that, you need also to consider when and how you ultimately want to 'access' the money. And then you need to overlay tax implications.

Only then should you zoom in to specific options, like which share(s), which funds, in or out of ISA, in or out of Pension wrapper? Or if savings, consider instant access or fixed term? Inside or outside ISA wrapper? Monthly interest or accrue it? Add to it regularly or draw from it regularly?

Finally, you would typically then shop around for good and convenient institutions.

To put it another way, let me ask you two rhetorical questions and let you decide which question has no answer:

1. What should I buy my wife for her birthday? Should I get her a new vacuum cleaner? I've ruled out a Chanel handbag because I've heard they are rubbish. But I've heard that a Bungee Jumping day is great fun.....?

2. My wife's food mixer broke down last week and I want to buy her a new one for her birthday. Does anyone have any recommendations as to whether the all in one Kenwood is worth the money? Or do seperate mixers/blenders etc. tend to be better these days...?

mikeyw

PParka wrote: »

Hi,

With £20k you could open 3 Lloyds Vantage accounts and put £7k in the first, £7k in the second and £6k in the third.
Each would recieve 4% interest. They are current accounts so you will still have easy access to the money.

Search for Lloyds Vantage on this forum and see what you think.

Thanks - I like the idea but you have to pay in £1000 per month which obviously takes you over the £7K - could you set up direct debits that move 1K between each of accounts each month to meet the requirement ?

Would they not stop you having 3 accounts with them ?

xrjtg

Yes, transfers between the accounts are fine. I have two, and others on here have opened 3 without problems (the terms and conditions do prevent you from opening more than that though).

mikeyw

Perfect - thank you very much.....any cash back available for setting these accounts up (quidco etc) ?

Lokolo_2

mikeyw wrote: »

Perfect - thank you very much.....any cash back available for setting these accounts up (quidco etc) ?

No Cashback, but they will more than pay for themselves in interest! :j

mikeyw

Just one last questions on Vantage - is the interest tiered ?

Or do you get the full 4% on the entire £7K in the account ?

If it is tiered the post office account might prove better

yorkiebar

All the Vantage info is on the LTSB internet site, it's not kept locked up in a hidden bunker somewhere!

http://www.lloydstsb.com/current_accounts/vantage.asp

The 4% applies to the entire amount BTW.

King_Weasel

xrjtg wrote: »

Yes, transfers between the accounts are fine.

Are you sure this is included in the £1000/month requirement? I've played safe so far and paid in money from elsewhere. (It doesn't stay there, of course, once the £7000 max is reached.)

Btw, the interest rate IS tiered in the sense that you need at least £5000 in to get the 4%, but it is paid on the full balance.