Spare £5000

portland44

Hi

My 3 year fixed bond has now come to an end. I would like to re-invest this amount in a new product. Not happy with the interest rate offered by Lloyds of 2.3% over 3 years that was based on £8400, the original amount invested.

Any ideas anyone.

YorkshireBoy

Lloyds Vantage current account pays 3% AER on £3-5K, and you can have up to 3 accounts.

Some hoops to jump through, but nothing major.

ChesterDog

Close Brothers is offering a 2-year fix at 2.3%. So a bit better than three years tied up.

Edit: Sorry, just checked. £10k+.

ChesterDog

And introducing an element of risk, you can look to 4+ percent in peer-to-peer lending. But not so easy to extract your funds, depending on quite how you do it.

jimjames

ChesterDog wrote: »

And introducing an element of risk, you can look to 4+ percent in peer-to-peer lending. But not so easy to extract your funds, depending on quite how you do it.

Or bonds/equity income funds in a S&S ISA if risk is considered an option.

4% plus available plus potential capital growth and all can be tax free with the annual ISA allowance

Eco_Miser

£2500 in Nationwide @ 5%. £2500 (up to £3000) in Clydesdale/Yorkshire Bank @4%. Review this time next year.

Ifts

ChesterDog wrote: »

Close Brothers is offering a 2-year fix at 2.3%. So a bit better than three years tied up.

Edit: Sorry, just checked. £10k+.

The AA and Tesco both have a 2 year fixed rate bond offering 2.25% (AA £1 min & Tesco is £2K min balance).

Also Shawbrook has a 3 year fixed rate bond offering 2.65% (£5k min balance).

Or for more options: http://moneyfacts.co.uk/savings/fixed-rate-bonds/

Glen_Clark

Bear in mind that if you are not a higher rate taxpayer, and you do not make more than £10,900 a year in capital gains, you will not avoid tax by putting stocks & shares in an ISA. So you could be paying fees for something you will never use.

jimjames

Glen_Clark wrote: »

Bear in mind that if you are not a higher rate taxpayer, and you do not make more than £10,900 a year in capital gains, you will not avoid tax by putting stocks & shares in an ISA. So you could be paying fees for something you will never use.

That is true except for bond funds you do get interest paid gross so save the tax even as a basic rate taxpayer.

For share based funds you also generally don't pay any more to hold them inside an ISA and it would seem to be good planning to hold investments inside an ISA so that they are protected from tax for future. If you don't use the allowance you can't claim it retrospectively so if the tax situation or CGT is different in the future it would be too late to protect them.

portland44

Thanks for all the info.

So are you saying it is best to wrap it up in a cash Isa, stocks and shares Isa or just a TSB Enhance?

I know the Nationwide has a good Flexi account but I am sure that would be difficult to open and is it worth it for £5000.

The TSB also have a saving account where you can pay up £250 a month over 12 months for 3%. What are your thoughts on that one?

ColdIron

I don't think anyone is saying what is best for you as only you know your circumstances, they are just suggestions for you to consider. Personally I think the Lloyds/TSB/BoS options seem to be appropriate for £5,000 and gives you a high interest rate if that is all you require. A Nationwide account is no more difficult to open than other current acounts mentioned but only you can decide if it is worth it to you

The TSB Monthly Saver you mention only allows £250 per month with a maximum of £3,000, what will you do with the rest of the cash in the meantime? Finally you need to open a TSB current account first of all and this could take all your £5,000 at 3%