Saving my car insurance money, best return?

wazza24

Just paid off my yearly car insurance in full for the first time, am sick of paying them £40 a year for the privilege of monthly direct debit. so was just wondering where to save the £30 a month i would have paid to get the best return? i have been thinking of opening a share fund but not sure this would be enough to put in on a monthly basis?

Any ideas would be get, thanks

xylophone

And when you need to pay up next year the shares might not sell for what you expect.
You could save regularly into an ISA or, if you prefer to keep your ISA allowance for longer term savings, into a regular savings account or any other savings account.
http://moneyfacts.co.uk/compare/savings/accounts/search/

Derivative

wazza24 wrote: »

Just paid off my yearly car insurance in full for the first time, am sick of paying them £40 a year for the privilege of monthly direct debit. so was just wondering where to save the £30 a month i would have paid to get the best return? i have been thinking of opening a share fund but not sure this would be enough to put in on a monthly basis?

Any ideas would be get, thanks

If you are saving the money to pay next years' car insurance, shares are a bad idea as they can be volatile. They are good for longer term (I would say 5 years minimum) investments, otherwise you are simply speculating.

Quick example, a ftse tracker:
http://www.google.co.uk/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1330128109874&chddm=1302028&chls=IntervalBasedLine&q=INDEXFTSE:UKX&ntsp=0

If you started buying late 2007 and were forced to sell late 2008, you'd be sitting on a decent loss. Conversely, if you started buying late 2008, and sold late 2009, you'd have been sitting on a nice rise. But you don't know that ahead of time. Share investments rely on you being able to choose whether or not to sell, not being forced to.

I would say the best option would probably be an easy access ISA. You can get about 3%.

To be honest - we are talking roughly 360 quid per year, times 3% interest, halved because you are adding monthly (first half of the year has less money, second half has more) £5.40.

I wouldn't say no to £5, but it's nothing to worry yourself too much over.

RoxRoxBling

I'd say an ISA too. How about an online account with your current bank account. That way you can simply transfer the money over, and watch it grow

opinions4u

In the great scheme of things, the interest isn't going to be earth shattering whatever you do.

But something is better than nothing.

Cash ISA or regular savings account is likely to do the trick. If you're likely to be saving the £5,340 / £5,640 limits in a cash ISA, use a different option for your car insurance.

By the way, sensible approach. Good for you.

wazza24

Thanks for the replies, think i'll go with the isa idea, thanks again.......:)