What to do with £15,000 savings?

mattylocke

Hi,
I am a 21 year old student with a year and a half left on my degree. My mum has recently downsized our home and given me £15,000 as a 'nest egg', with the advice that it would be best placed in premium bonds, as they are inherently safe and there is a chance I could win significant cash.

However, upon researching premium bonds I have arrived at the conclusion that they are by no means the best way of investing savings.

What advice could you give as to what would be the best way to save? I would be willing to put the money away for several years without touching it if it were to get me an improved rate.

Cheers!

HappyMJ

Premium bonds are rubbish.. you'll be better of putting the money into a high interest savings account and using the interest to buy lottery tickets. It's gambling.

I'd make sure you have everything you could possibly need for when you get a job. A car, decent furniture and household appliances etc.. Then use the money to put down the deposit (6 months rent up front) on a small rental property until you can earn enough to be able to save enough to buy with a decent deposit and get a mortgage on the house of your dreams.

Glen_Clark

HappyMJ wrote: »

Premium bonds are rubbish.. you'll be better of putting the money into a high interest savings account and using the interest to buy lottery tickets.

Premium bonds pay out 1.5% tax free in prizes. Lottery tickets pay out only 50% in prizes. So you would have to earn 3% net interest to be better off doing that. Which high interest savings account do you suggest that pays 3% net?

snowcat53

Both are gambling and imho both are terrible options.
You can get at least 3% net on a cash ISA (instant access) for 5640 of that 15k this year, and add more of it next .

bryanb

You can get at least 3% net on a cash ISA .

Surely you mean at most?

grey_gym_sock

£5640 in a cash ISA is good idea.

you might put some of the rest of the money in a 1-year fixed rate - if you won't want to access most of it until you graduate. that will currently get you a little more interest than an instant-access account.

if you have little of no other income now, then there's no tax due on interest anyway (i.e if your total income is under c £8k). you can fill in a form to receive interest without tax deducted.

interest in ISAs is tax free, which may not make any difference now, but will if you leave the money in there and are earning more later on.

marathon_man_3

snowcat53 wrote: »

You can get at least 3% net on a cash ISA (instant access) for 5640 of that 15k this year, and add more of it next .

I agree with that.
Place £5,640 into a cash ISA now, put the balance on deposit for 6 months then place a further £5,640 into an ISA account with the balance going either into a longer-term fixed deposit account.

First Save currently pay 2.6% gross for the 6-months deposit.

oldfella

put £100 into premium bonds and you have a chance of a big prize

the odds of winning a big prize by increasing the amount you put in do not alter enough to make much difference

gozomark

oldfella wrote: »

put £100 into premium bonds and you have a chance of a big prize

the odds of winning a big prize by increasing the amount you put in do not alter enough to make much difference

well, put in £ 200 and they double :-)

oldfella

gozomark wrote: »

well, put in £ 200 and they double :-)

double an extremely small number is still an extremely small number

gozomark

in that case, why bother putting even £100 in ?