Advice needed! - Where to put £500 per month?

peterdoherty

Hi Folks,

I have around £500 per month to 'put away' what would be the best thing to do with it?

I'm a 25 year old male with a small mortgage and no other debts. Living in Northern Ireland so can only access branches of abbey/alliance & leceister/nationwide or NI banks (i.e no barclays or nat west unless its totally web based).

I have a really good current account which is totally fee freee wiht a 2k overdraft (free!) so would be unwilling to change this unless I'm getting the same deal.

Would prefer something with almost instant access but wouldnt mind putting some of this (50% pm) away into a longer term/hogher interest/harder to et at type of thing.

Any suggestions????

Thanks,
Peter

empfun

Hey Peter, I would recommend ICICI with their high interest rate and instant access. It is a web based account.

Cypher

I'd be looking at the current batch of regular savers that all the banks seem to be offering especially if its new money each month your saving.

I would probably look at opening a ISA if you haven't already and getting as much as you can of this years £3000 put away now before April to use up some of your 06/07 allocation and lock away those tax free savings. Then look to do the same next year as well putting £3k in before the end of March 08 (which you could withdraw from the regular savers just before the end of cut off period).

jamesd

If it's five or more years, 500 a month will use 6000 of your 7000 maxi stocks and shares ISA allowance each year. With 50 per fund a common minimum for monthly contributions it would let you hold ten funds in a nice mix of funds in different regions of the world and market sectors.

If it's less than five years and your risk profile isn't high, a pair of regular saver accounts which feed into a cash ISA once they end is the way that's likely to make you most money.

Since you want a 50:50 mix of short and long term, 250 a month into at least five funds in a mini stocks and shares ISA and 250 a month into a regular saver that eventually feeds into a mini cash ISA is likely to be best.

All of this is easy enough to do over the web and via post.

thesaint

What interest rate are you paying on your mortgage? If your mortgage interest rate is higher than the rate you would get (net) from investing, it would be counterproductive. Does your mortgage allow extra payments that you can ask back if you want it?

peterdoherty

mortgage is tiny so am not worried about it. thanks