£40000 and what to do with it

huskypup

We will have £40000 to save/invest in Mar 2015 and not sure what to do with it - we are not risk takers and would like access to it quite easily should we wish to.

We are currently saving £300 a month but from Jun 2017 this will go upto over £1000 a month.

I am toying with the idea of Mar 2015 - open up two ISA's then in April 2015 another two. This would leave about £25k still to do something with.

We currently bank with Lloyds - we have never had this sort of money before.

Thank you

Archi_Bald

Same answer as for everyone else in these circumstances: current accounts. You can find a list of suitable accounts here, and there are threads on all these accounts on the forum.

Ebe_Scrooge

Do you have a mortgage ? If so, you could do a lot worse than making an overpayment ( if you're allowed to do so ). OK, this means that you don't have access to the money any more, but overall it'll make a massive saving to what you pay on the mortgage interest, and mean you pay off the mortgage quite a lot earlier. There's an overpayment calculator on this site that will show you exactly how much you'll save.

DragonQ

You can get 3% or more on most of that by splitting it as follows:

- Santander 123: £20k
- Tesco Current Account: £6k
- TSB Plus: £4k
- Club Lloyds: £5k

Note that Lloyds and Santander require 2 DDs per month and the latter charges £2pm so you want to have DDs that maximise cashback. If you have a partner you can fit all £40k in these types of accounts by having them open the maximum number too. There's also some regular savers floating about (4% at Lloyds, 6% at First Direct, 4-6% at HSBC).

If your mortgage interest rate is above 3% then definitely pay some of that off if you can.