£5k to invest?

Scotinho

Hello,

I am new to this and I have been browsing through the site and online in general looking for some information.

We have £5k to invest but don't know where or how? Preferably 3-5yrs investment but not sure.
I have been told that government bonds are more secure and have reasonable returns, who do i speak to regarding that? How does it work? Do we speak to our bank regarding investment? Basically I just need to know who to talk to, to get the details I need. Do i need a broker or is that unneccesary?

Thanks
Scott

waiax73

Depends on what you need. If you're new to investing you can try model portfolios with a certain risk level that fits you. I passed on banks and IFAs and invest with rplan (execution-only broker). They are cheaper than most (compare the fees of the biggest brokers in UK - http://www.rplan.co.uk/Home/CostComparison) and you can choose from thousands of funds or find a different provider that suits you.
I'm also new to investing and am happy with my S&S ISA with them.

Hope this helps.

Cheers

Rafter

Scott,

Most banks won't want to know for that some and will charge you a minimum of £500 for 'advice' so that is a non starter for you.

The return on government bonds is currently worse than most savings accounts so I wouldn't go down that route.

Your choices therefore boil down to either a savings account from the links at the top of this page or buying shares or bonds.

Given the sum you should look at an ISA so that any interest or income is tax free.

If you are prepared to take some risk you might invest in a stocks and shares ISA - but you do run the risk that the stock market will be lower than it is today in three or five years time.

You could look at preference shares or corporate bonds but again you run the risk that you pick a firm that gets into trouble and you don't have a big enough amount to invest to spread across different categories.

So.
Low risk - savings account or savings bond
High risk - Stocks and shares ISA - A FTSE tracker or one investing in preference shares or corporate bonds.


Good luck

R.