£20,500 to invest

bundly

I have a Nationwide Bond maturing soon, yielding just over £20,500. I've heard that people who just reinvest in the same place again often lose out on something better, but there seems to be such a bewildering array of choice of low rates (lol) that I don't know where to start.

I am completely risk-averse, but I am not dependent on the interest from this money, I'd just like it to grow.

I have not yet put anything into an ISA this year yet, so I guess I should put £5340 into a NW cash ISA, and £5340 into stocks and shares, but

(a) how do I invest in a stocks and shares ISA without any risk.

(b) what can I do with the remaining £9820?

A bit of me feels like sticking the lot into Premium Bonds - is that as crazy as it sounds?

Bundly

opinions4u

NS&I

http://www.nsandi.com/savings-index-linked-savings-certificates

£15k in your name. The rest in the name of a partner. If there's no partner, Halifax ISA Direct Reward.

how do I invest in a stocks and shares ISA without any risk.

You can't.

A bit of me feels like sticking the lot into Premium Bonds - is that as crazy as it sounds?

Mathematically, a poor choice. But if you want to dream of £1m you could go £15k NS&I, £5,340 ISA and £160 Premium Bonds.

bundly

opinions4u wrote: »

NS&I

http://www.nsandi.com/savings-index-linked-savings-certificates

£15k in your name. The rest in the name of a partner. If there's no partner, Halifax ISA Direct Reward.

You can't.

Thanks mate. I don't have a partner, by the way.

I've followed the link, and am confused now. They say the certificates are tax-free. How can that be, if they are not ISAs?

Annisele

bundly wrote: »

They say the certificates are tax-free. How can that be, if they are not ISAs?

ISAs aren't the only tax free product around. The NS&I certificates are one of the others.

bundly

"ISAs aren't the only tax free product around."

Well, then, I have learned something new today!

I've just read an entire thread about the certificates, and there was no firm conclusion.

As they don't give an actual interest rate, how can I compare them with, for example, what I'd get if I just put the money into another Nationwide Bond? A three-year NW bond would yield 2.96% (net - I am a taxpayer)

And what about this thing?

http://www.nationwide.co.uk/investments/protected-equity-bonds/default.htm

I am happy with the six years, but is it good? Better than the certificates? Hmmm.. I suppose nothing is going to be better than the certificates, is it, because they are tax free! And I guess that trumps ANYTHING that is being offered elsewhere - am I right?

Still learning

Bundly

TheMatrix_2

You're taking a punt on the RPI with these certificates, as this is not guaranteed and no one can predict what RPI will be in a years time you wont get a rate to compare.

opinions4u

The key with NS&I index linked is to bail out if inflation starts to fall too fast.

At the moment they are paying over 5% tax free with easy access. Timing your exit well could mean you get out as inflation falls and then benefit from rising savings rates.

bundly

Aw gawd blimey this is starting to get complicated! I have to keep an eye on inflation rates and bail? I'm afraid I am one of those who likes to invest then forget about it, get on with my life knowing it's growing safely somewhere. Of course I could change the sort of person I am if it was necessary.

bundly

I am also confused because these tax free certificates aren't listed in Martin's Savings Fountain on this forum - why not?

http://www.moneysavingexpert.com/savings/which-saving-account?utm_source=forum&utm_medium=clicks&utm_campaign=resourcebar

Sceptic001

bundly wrote: »

I am also confused because these tax free certificates aren't listed in Martin's Savings Fountain on this forum - why not?

http://www.moneysavingexpert.com/savings/which-saving-account?utm_source=forum&utm_medium=clicks&utm_campaign=resourcebar

Because it says it was last updated on 5th April 2010...

The point about index-linked certificates is that they protect you against inflation (plus a bit more). So at the moment with high inflation they are a very good option. If inflation falls and/or other savings rates rise, they may not remain so competitive, but you can still be assured that your nest egg is not being eaten away by price rises.

cashbackproblems

HSBC Index tracker fund through HL. Can be opened within an ISA and has low charges

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hsbc-european-index-accumulation