Savings account or ISA?

Dizzy651

Hi

I am due to receive about £18k on 1 April. £5k will be used immediately to pay off my loan. £10k will be used at some point in the next few months when I remortgage to get a better rate. The balance will be used over the next 6 months or so to finance a project I'm working on.

I will have roughly £13k in 'savings' for a couple of months so would like to invest this somewhere where it will earn me a decent return.

Where am I best to invest? Presumably isa or savings account will be best? Any suggestions?

Many thanks

Archi_Bald

For just 2 or 3 months, you don't go for investments but instead firmly stick with cash.

The best interest for cash is currently paid by some current accounts. Forget about savings accounts and any form of ISAs. The realistic interest after BR tax is some 2.4% AER but there are some accounts where you can push the amount to 4% AER. So you can get something like £85p - £1.50 a day for each day you have your money in the accounts. Check the Savings article on the main website, and you can also find thread on the best current accounts here on the forum.

Dizzy651

Thanks. I didn't think a current account was an option because I'm not looking to pay regular monthly payments into the account?

eskbanker

Dizzy651 wrote: »

Thanks. I didn't think a current account was an option because I'm not looking to pay regular monthly payments into the account?

It's pretty straightforward to shunt money around between accounts in order to satisfy these requirements - you could for example transfer £500-1000 out of your 'saving' account into your existing current account and straight back again every month (either manually or via SOs), job done!