Safe - Short Term High Investment

eddietheboyp

Hello, first time user on the forums.

I have inherited a large sum of money in the region of £100K and will be looking at purchasing a house with the money in the next 12 months or so. As a self employed/business start up, I want to get settled in to work before committing to taking out a mortgage and all the expenses of homeownership so will rent a room off my sister in the meantime.

My question is besides my maxed out ISA (at £5.5K started this year), where's the best place to put my money. I already have about £5K in shares (my risky investment - and realise I can shelter more of my money from tax in share ISA), this £100K needs to be safe but I'm looking for the best return. Is a 2.8% savings account the best I can expect?

Many thanks for the help

atush

Well you can bed and breakfast your shares into an ISA for a start.

You may have to wait longer than 12 months if you have started your own business as they may require 2 or more years accts first.

No way will you get much more than 3% these days w/o at least some risk. You could always see what you could get by investing in a good income fund for 12 months with say, 10% of it- will give you a chance to make a bit more, but will limit your losses if things turn sour.

I know you want this money for a house, but as I assume you will be saving monthly in the mean time, have you got any debts? A pension? Pay debt off first, and consider starting a pension.

xylophone

http://www.moneysavingexpert.com/savings/safe-savings

Is a 2.8% savings account the best I can expect?

You might be lucky to get even that!

http://www.thisismoney.co.uk/money/saving/article-1583859/Best-savings-rates-Internet-branch-50s-savings-accounts.html

Glen_Clark

I really wouldn't bother putting £5k of shares into an ISA, it will cost you more in charges than you will save in tax.

MrsCautious

I wondered if your 'or so' could turn into longer, from what I've seen, the 2/3/4/5 year fixed bonds could be the best safe returns, also adds more peace of mind if you are concerned by the £85k savings being 'safe' in one bank guarantee? I've recently divided a lump sum into these different bonds, opting to pay interest into a regular saver which pays 4 per cent but has limit of £250 a month allowed to be paid in, by no means a huge amount but am trying to squeeze every last penny out while having different maturity dates in case interest rates change. If you need self employed books for 2/3 years to get mortgage, does that make a difference? Good luck whatever you decide.

jamesd

Given your plans, your most appropriate option seems to be savings accounts. Any money that you do not anticipate using for that could be invested instead.

eddietheboyp

Thanks for your reply. Yes all debts paid off, pension plan set up. Sounds to me that adding cash every month to the pot and keeping it in a standard saving account is the best bet then.