Best way to invest £4000

ffowles

We've unexpectedly ended up with £4K to invest and are looking for ideas with what to do with it. We currently have no debt, but no savings either. We're hoping to move house within the next few years but can tie the money up for a shorter period of time, such as a year or maybe two years. We are happy to split the money between something low risk and something high risk.

Should we just stick it all in a cash ISA and have done with it or is it worth doing something else as well?

Thanks
Freya

Carpi09

Investing for a maximum of 2 years wouldn't be suitable so a cash isa would be most beneficial to you.

bowlhead99

Cash ISA is sensible - agreed, if you need it in 2 years you shouldn't invest it because a part of it might not be there in 2 years when you need it.

If you literally have no other savings, then you're saying this unexpected 4k is your entire life savings, and the only thing to fall back on in an emergency. Lucky break that it found its way to you. Unless your income is guaranteed (e.g. perhaps you're drawing a pension) it wouldn't be wise to tie it up in a fixed saving product that doesn't allow withdrawals, because then it doesn't serve its purpose of being an emergency fund.

So your cash ISA needs to be an instant-access one, or alternatively one that at least doesn't charge you too much of a penalty when you need to get it back.

jimjames

Regardless of timescale if you have no savings then you should keep this as cash as your emergency buffer. If you are looking to move then you need to have sufficient funds to cover the costs of moving even if you need no addition deposit money.

Cash ISA is likely to be the best place although if you are basic rate taxpayers there isn't much difference in the rate.

kidmugsy

Or, open a vantage current account at Lloyds TSB. You can get 3% p.a. interest, and the money is accessible by ATM, cheque or e-transfer. After tax it's paying 2.4% which is about the best you'll get in an instant access ISA anyway.