first time invester

loady

So is say 3% the total for the whole year ? 5000 will earn me £150 ?

droopsnoot

That's right, AER is the annual equivalent rate, so the percentage that you earn annually on your balance.

brasso

loady wrote: »

So is say 3% the total for the whole year ? 5000 will earn me £150 ?

Rubbish, isn't it?

In fact, with inflation at around 3%, you are not "earning" anything at all, but only preserving the value of your initial capital. It makes sense if you are ultra-cautious by nature and/or if you are deeply pessimistic about the short and mid-term economic future and/or you need the capital in the short term.

If you have a reasonable period of time - say 5-10 years - and want to see your money grow, you need to invest rather than just deposit.

loady

Going to a meeting today at halifax with thier financial advisor, hoping to find out a little more about all this investment business, of course i will not be taking what they offering straight away ( i cant anyway becasue of FSA rules) so i will, armed with the information, look online for better deals...so where should i be looking..i dont really want to select every little detail, moreover looking for a package i can select that will grow my savings better than a cash isa with medium risk, this money we will be locking away for a long time.

atush

The LAST place you should go for financial advice is any bank (esp a failed bank) so please dont' sign anything.

And their poorly paid and trained advosor will not educate you in investing, the best way to do that is reading up?

jem16

loady wrote: »

Going to a meeting today at halifax with thier financial advisor, hoping to find out a little more about all this investment business,

You're not going to find out anything about the investment business from a tied financial adviser who can only discuss a limited amount of products which are mostly poor and expensive.

of course i will not be taking what they offering straight away ( i cant anyway becasue of FSA rules)

Not sure what FSA rules you are referring to?

i dont really want to select every little detail, moreover looking for a package i can select that will grow my savings better than a cash isa with medium risk, this money we will be locking away for a long time.

Investments aren't really like that. Anything that's built into a package and simply tied up for a long time are not likely to be the best thing. If you mention that to the Halifax FA you are likely to end up with either a structured product like a GEB or an Investment Bond, neither of which are likely to be suitable for you.

loady

I really dont know whats best to do with this money, about 15k to lock up..i have already set aside emrgency funds which will go into a santander 2yr fixed isa at 4%

Spiggle

Hi loady,

Can I just clarify what you have done please? Reading the thread it looks like you've put £5k each into Halifax ISA for you and your other half in this financial year 2011-12. Is this correct?

You say you have set aside 'emergency' funds to go into a 2yr fixed ISA. Is this going to take all your and your other half's ISA allowance for 2012-13? Normally your 'emergency' funds would be easily accessible without penalty and (without checking) most Fixed rate ISA (FRISA) have penalties for early withdrawal/closure.

I can't offer any advice on investments it's not my bag but if you're looking to max out cash savings, you could put the bulk into the best easy access savings account, e.g. Sanatander http://www.santander.co.uk/csgs/Satellite?appID=abbey.internet.Abbeycom&canal=CABBEYCOM&cid=1237848019094&empr=Abbeycom&leng=en_GB&pagename=Abbeycom%2FPage%2FWC_ACOM_TemplateW2 which is paying 3% gross and then drip feed monthly into a product which you can make regular savings into e.g. Monmouthshire http://www.monbs.com/flexible-saver-issue-2/, or an ordinary reg saver. You could open one each for you and your partner and after 12 months you would receive net interest equivalent to 3.2%.

The answers to my first questions above could change the perspective of course. If you are not using up 2012-13 allowances for instance you may well be better off looking at some longer term FRISA but, personally, I wouldn't go longer than 3 years unless 5% or above is available.

Hope that helps and hasn't muddied the waters for you.

All the best,
Spigs

loady

We have not done anything yet, we have 28k spare, out of that we have to have emergency funds and the rest we can save... The appointment at halifax was useless really, we only are going there to be eligible for the draw, we have not yet used our allowances for this year yet.

atush

Emergency money can be in an ISA but should be easy access.

Other money can be tied up in (or out of) ISAs for longer.