Best investments for 50k

jb123_3

Would like to know where to invest 50k with no risk but guarentee a profit, do you have any comments regarding the post office accounts at 5.5% is their much better or easier ways please.

Rafter

In order of riskiness.....

National Savings (backed by the government)

UK Bank or building society savings (backed by the savings deposits guarantee)

Suggest you get 2 cash ISA's one before 5 April, one after. That way £6000 is tax free too which will really eat into your interest.

Best buy savings rates should pay 0.5% above base rate, so 5.75% at least and you can access best buy tables at moneyfacts.co.uk

You might get a slightly better return if you are prepared to invest slightly longer term, although at the moment it doesn't make much difference. However, if you agree with the markets and Bank of England that rates will fall next year, you might want to lock in at a higher rate now.

Good luck.

R.

dunstonh

5.5% before tax works out to 4.4% after tax which is lower than the current RPI. So, in real terms, you will be losing money.

jb123_3

Thanks for your advice, i have opened an isa sometime ago. Still unsure where to put the 50k never had this amount before so i'm a total novice.

Until i have made a decision whether to tie it up for 5 years where is the best interest saving rate?

Any websites you can suggest to look at would be helpfull.

Thanks

jamesd

You'll need to take some risk to do significantly better than high interest savings accounts. Those are where you should put it while you decide. NS&I also offer some products which guarantee 1-2% above inflation and some people like those, but that's not a particularly good result.

If you can stand some ups and downs and can say what sort of percentage down you'll accept for a couple of years it's possible to build combinations of funds investing in different sectors that will achieve that desired level of risk of temporary downturns, while increasing the probable return. If you search here for "sector allocation" and "asset allocation" you'll find some discussion about how this is done.

Essentially, you pick a mixture of funds of different risk levels and likely returns and the lower risk ones and spread across different sectors limits the potential drop level, while still providing a return that's likely to beat savings accounts over the long term. You can't completely eliminate down periods this way but those matter only if you're forced to take the money out during one of the down times, which is why it's described as a long term option - you may need a year or three to climb back after a drop before getting ahead of the savings accounts again.