£57,000 to invest for 10 months

Mackayi4

Hi.

I have recently had an endowment policy mature and I now have £57,000 to invest for approx 10 months after which time I can use it to pay off part of my mortgage. Both my wife and I are in the 40% income tax bracket.

Should I split the sum across two ISAs this year (one for my wife, one for me) and another two after April or would a High Interest account be more suitable ?

Any pointers would be much appreciated. :undecided

innovate

Mackayi4 wrote: »

I have recently had an endowment policy mature and I now have £57,000 to invest for approx 10 months after which time I can use it to pay off part of my mortgage.

you don't invest anything for 10 months - way too short an investment horizon. Investments need to be done over some minimum 5-7 years, preferably even more.

If indeed you need the money to pay off your mortgage in 10 months time, you just find the best savings vehicle between now and then. Savings rates are quite dire right now, but some people can still get interest in savings accounts than they have to pay in interest for their mortgage. What is your mortgage interest rate?

Mackayi4 wrote: »

Should I split the sum across two ISAs this year (one for my wife, one for me) and another two after April or would a High Interest account be more suitable ?

All savings interest rates are dire right now, but ISAs are still better than non-ISAs, particularly for 40% tax payers. So yes, may be cash ISAs (not S&S ISAs) are your best option. Best available ones are always in post 1 of this thread.

Mackayi4

Thanks Innovate.. Much appreciated.

Totton

Whilst I think investing IS for the long term there is plenty of scope to invest for the short term and make a profit in the current environment. With a favourable wind you could make 10 - 20% before you needed the money, or you could lose 40%!. The question is not where to invest but whether you have the risk appetite for such a venture.

If willing to take a high risk then why not chance your arm and invest into one of the many IT's or funds being recommended for 2013, alternatively go for a tracker such as Vanguard Life Strategy 100% or one of the less risky ones such as the 60%. If you need ALL of the 57k then I would not invest it but stick it into the best savings accounts you can find, if you can afford to take a 10% hit then you could invest for the short term and withdraw the money if things turn sour. Of course this is a form of gambling but sometimes a risk is what we take.

Mackayi4

Thanks Tottan

Mmmmm... has given me food for thought.

Much appreciated

Linton

Totton wrote: »

Whilst I think investing IS for the long term there is plenty of scope to invest for the short term and make a profit in the current environment. With a favourable wind you could make 10 - 20% before you needed the money, or you could lose 40%!. The question is not where to invest but whether you have the risk appetite for such a venture.

If willing to take a high risk then why not chance your arm and invest into one of the many IT's or funds being recommended for 2013, alternatively go for a tracker such as Vanguard Life Strategy 100% or one of the less risky ones such as the 60%. If you need ALL of the 57k then I would not invest it but stick it into the best savings accounts you can find, if you can afford to take a 10% hit then you could invest for the short term and withdraw the money if things turn sour. Of course this is a form of gambling but sometimes a risk is what we take.

Or there's the roulette table.

Topgun2013

Hi there,
Personally from what I have read from your post, rather than letting your money "burn a hole in your pocket" by making any hasty decisions looking to find a 10 month solution. I would advise you still pay of your mortgage, but consider using this money for a sensible 5 year term and get maximum benefit from it. FYI, Financial Advisers and Wealth Managers are recommending Diamonds as a 'Safe Haven' Investment, simply because Investment Grade Diamonds or Natural Fancy Color Diamonds are a true store of value and Investment Diamonds are a hedge against inflation and the return on investment is higher than most asset classes and prices are determined by scarcity, not world economies. Also the price of Fancy Colored and Investment Grade Diamonds is rising due to very strong and increasing demand and dwindling supply. In summary, 10 months is too short and unrealistic as a term unless you were willing to risk your money on some of the general markets, however you could be looking realistically at 10% to 30% growth p.a. if you were prepared to invest in the above over a 5 year term. "Hope this helps!"

Radiantsoul

Honestly if you want to pay off your mortgage I would just hold it in a savings account. The interest over 9 months is not going to be huge, and things like ISA/not ISA are not going to make much difference.

If you do anything chasing a higher return you will incur some risk. Is it worth it? If you lost 10k how would you feel?

xylophone

ISA/not ISA

Both OP and OH are in the 40% bracket - might as well use instant access cash ISA allowances for this tax year and next - no point in paying tax if they don't have to.

Radiantsoul

xylophone wrote: »

Both OP and OH are in the 40% bracket - might as well use instant access cash ISA allowances for this tax year and next - no point in paying tax if they don't have to.

I suppose so, the amount they can shelter is about £22k which will be £650 of interest per year at 3%. So the saving is probably around £200 which is worth having.