Where to invest £25k or less...

missis_amber

I have managed to save £25,000 and it's just been sitting in a current account
I have been regularly saving which is how I've managed to save this amount, but with redundancies looming at work I realise that it's more important than ever to make the most of any money I have and to let it grow...

I am thinking of investing the maximum ISA amount into the new Gold ISA with Barclays before the ISA deadline...
Shall I then wait til 6 April and invest in another ISA?

That will still leave me under £15k...what should I do with that? I don't want to lock it away for too long because I have a young child and I might be buying a house in 1-2 years time...

Thank you xxx

psychic_teabag

Yes, I should think that using this year's ISA allowance should be a priority. If you go for an instant-access cash ISA, then even if you decide to put it somewhere else, you can just take it out again, but if you miss the end-of-year deadline, you've missed your chance at the 2010-11 allowance.

I'd also suggest moving the rest to an instant-access savings account so that you start earning interest in the short term. Again, can then move it somewhere more appropriate later. Check the best-buy tables.

New_York_No1_fan

missis_amber wrote: »

I have managed to save £25,000 and it's just been sitting in a current account
I have been regularly saving which is how I've managed to save this amount, but with redundancies looming at work I realise that it's more important than ever to make the most of any money I have and to let it grow...

I am thinking of investing the maximum ISA amount into the new Gold ISA with Barclays before the ISA deadline...
Shall I then wait til 6 April and invest in another ISA?

That will still leave me under £15k...what should I do with that? I don't want to lock it away for too long because I have a young child and I might be buying a house in 1-2 years time...

Yes definitely put your max £5100 into an ISA before the deadline in April and then put in the max allowance again for 2011-2012. Think it increases to about £5400? have read it somewhere on this site.

However when putting money into a savings provider check their reputation for customer service etc as personally I wouldn't touch certain companies which I have had bad experiences with in the past, one of them being Santander! But thats just my opinion.

There are plenty of other accounts you could put the remainder in, if you are likely to need access in the next year or so, these include bonds if you want to lock away for 12mths/24mths or savings accounts where you need to give 30/60/90/120 days notice to make a withrawal. The longer you lock money away, the more interest you are likely to make.

Internet accounts tend to pay a higher rate of interest however that depends on how you prefer to save.

Marco12452

If you invest in a stocks and shares ISA, you have up to £10200 this year, then the same next year (from 06/04/11) for the next financial year. The new years allowance will rise by the RPI rate too, allowing for a little extra to be put in.
Stocks and shares are volatile though, so this is totally your decision based on your attitude towards risk.
The investment should be considered a longer term one, 5+ years, in which time a good balanced portfolio should return better than any savings, cash ISA or bond.

_s79

Personally I`d just put it in an instant access account with somewhere like "The West Brom" @3.01%

According to my sums, if you split it between 3 accounts (x2 Barclays ISA's @3.25%) and the rest in an instant access @3.01% then you could make an extra £2 p/m.

WB WebSaver
£25,000 @ 3.01%
= £62.71 p/m

or

WB + ISA1 + ISA2
£14,500 @3.01% = £36.37
£5,100 @3.25% = £13.81
£5,400 @3.25% = £14.63
= £64.81 p/m

Eco_Miser

missis_amber wrote: »

That will still leave me under £15k...what should I do with that? I don't want to lock it away for too long because I have a young child and I might be buying a house in 1-2 years time...

Thank you xxx

You could put £14k in two Lloyds TSB Vantage accounts and earn 4% gross. read about it here

tofu

Marco12452 wrote: »

If you invest in a stocks and shares ISA. [...] The investment should be considered a longer term one, 5+ years, in which time a good balanced portfolio should return better than any savings, cash ISA or bond.

Given that the OP said he might want to buy a house in 1-2 years time, S&S are probably ruled out. However, some fixed-rate accounts don't pay much less net compared to an ISA, so that may be an option for the remainder.

The Santander "first time buyer" account (5% gross, 5k maximum initial investment) was just recommended, which may be just what you are looking for as well.