How to best save £20k?

VodkaLime

Hello. I have recently inherited £20k. Should I just open a cash ISA and fill the 15k limit and put the remaining £5k in a high rate current account? If so what would you suggest would be the best ISA and current account? My current account is at the moment with Barclays. Or any better suggestions? I will need to have access to the money in case of emergency or as I might use it as a deposit later this year.

Thanks in advance.

Archi_Bald

It all depends on your circumstances and needs - how old are you, when do you need the money, what is your tax band, what if any debts do you have, what are your pension arrangements etc etc etc

Although it has to be said that cash ISAs are presently one of the very worst places for money.

VodkaLime

Thanks Archi. I am 41, not sure when I will need the money. Might use it as a deposit to buy a flat and if so it would be probably end of this year or beginning of next. But this is still just a consideration as not sure I would want to take on a mortgage. Another plan is to do a rear extension on our mortgage free house spring/summer 2016. I have a personal loan which is stands at the moment ca. £7k on a 5.6% rate. Basic tax band. No pension arrangements.

AndyPK

I would have thought pay off your loan.

Put remainder in a santander 123 current account. 2.3% interest (you won't get close to that in an ISA unless you have £24K)

Santander 123 requires direct debits, so move some of you bills over to that, e.g phone, broadband, gas, elec. These will give you cash back to cover the £2 month fee.

jimjames

If you have no pension then sorting that out should probably be a priority.

A cash ISA would probably be about the last place you should put the money. Current accounts pay far better and clearing the loan would also make more sense than cash ISA.

bigfreddiel

AndyPK wrote: »

I would have thought pay off your loan.

Put remainder in a santander 123 current account. 2.3% interest (you won't get close to that in an ISA unless you have £24K)

Santander 123 requires direct debits, so move some of you bills over to that, e.g phone, broadband, gas, elec. These will give you cash back to cover the £2 month fee.

Don't forget to pay in £500/month!

Cheers fj

Ps it pays 2.4% for your normal tax payer

VodkaLime

Thank you guys. Much appreciated.