What to do with £39,000?

Kicks4Free

[FONT=&quot]Hi,[/FONT]

[FONT=&quot]I’m looking for advice about what to do with nearly £39,000. I’ve buried my head a bit when it comes to this money and most of it (£20,500) is in a no interest Co-operative current account. £18,000 of it is in a Co-operative cash ISA, though I haven’t added anything to it this tax year.[/FONT]

[FONT=&quot]I currently take home about £1200 a month with very little outgoings. I was thinking of using the money for a deposit on a house, but a lack of job security has ruled that out for the time being; I suspect that I may be made redundant soon. If this happens then I may use some of the money to go traveling for a year, and/or to support me whilst I do a masters course. [/FONT]

[FONT=&quot]This indecisiveness about what to do with my life is one of the reasons why I haven’t made any decisions about what to do with this money; I have been reluctant to tie it up but it’s getting silly now. Any advice about what to do with it would be greatly appreciated! [/FONT]

[FONT=&quot]Thanks[/FONT]

colsten

You can get 3, 4 and 5% in current accounts for around £50,000. All information is on the site.

MarkBargain

Take a look at Santander, as you can get 3% interest on £20K with their 123 current account (plus cashback on bills, less £2 a month fee), and they pay 2% on one of their fixed rate ISAs. Be quick and use your 2014/15 allowance for that. Topcashback pay £36.75 for opening a Santander 123 account.

You would probably get a higher return by investing in share based funds and could use an ISA for those, but there is some risk with shares obviously.

Ryan_Futuristics

colsten wrote: »

You can get 3, 4 and 5% in current accounts for around £50,000. All information is on the site.

Yeah

All you have to do is set up 10 bank accounts, we'll label them A to J ... Set up a standing order in A to pay into B and C, set B to pay into E, E then pays back into D and G, then you'll need to wait a day and have a staggered standing order paying back from H into your main account, then just three standing orders coming out of G into I, then wait a day, and you want a standing order coming out of E into C

Then you just transfer your heating and water bills to C, whist setting up a standing order to pay the interest from C into G and H, and after a year, transfer C into J, because the rates goes down to 0.1%, and clear the excess in J by transferring it into a new account called K, which needs three standing orders coming out of it, into B, C and D, then wait a day and E pays into B

Then the tricky bit: you have to get married to yourself so you can set up two addition accounts in C (a husband, wife and joint), then three standing orders can coming out of there into K and J, wait a day then a standing order goes from J into B

After fees, tax and money that gets lost in the system (that even the FBI couldn't track by now) you can expect to reap a COOL 0.1% over inflation :cool::cool::cool::cool::cool:

Gadfium

Ryan_Futuristics wrote: »

Yeah

After fees, tax and money that gets lost in the system (that even the FBI couldn't track by now) you can expect to reap a COOL 0.1% over inflation :cool::cool::cool::cool::cool:

Ryan, just because you don't understand how to do it, it doesn't mean that it can't be done. Or that others are also unable to do it.
And as for 0.1% above inflation? I'm sure that you can work out that 5% (even after deducting tax) is a lot more than 0.1% above inflation.

You're just making yourself look sillier than normal by adding this to your list of chips on your shoulder.

colsten

Ryan, it is astounding that someone with the knowledge you claim to have keeps posting so much misinformation about multi-accounting.

HardCoreProgrammer

I understand that current accounts is the best option for the OP as access to it may be required in the short term. In this case, 2 Santander current accounts will cover the amount of money involved.

But if you are not short term investor, why this obsession with current accounts? I get a better yield on equity income funds than the interest on these current accounts, and it is less hassle too.

Archi_Bald

HardCoreProgrammer wrote: »

I understand that current accounts is the best option for the OP as access to it may be required in the short term. In this case, 2 Santander current accounts will cover the amount of money involved.

the second one would have to be a joint account though, which may or may not be a problem.

HardCoreProgrammer wrote: »

But if you are not short term investor, why this obsession with current accounts? I get a better yield on equity income funds than the interest on these current accounts, and it is less hassle too.

Agreed. But as you say, the OP doesn't appear to be ready just yet for longer term investing.

Ryan_Futuristics

My problem with the current accounts swindle is, with everything capped, there are no real long-term benefits to saving ... no compounding, no long-term growth

It's just e.g. £78 from TSB if you put £2k in move £6,000 through it with direct debits ... £71 from Tesco bank

You'd do better grabbing a bucket of water and a sponge and offering to wash your neighbour's dogs

Archi_Bald

Ryan_Futuristics wrote: »

My problem with the current accounts swindle is, with everything capped, there are no real long-term benefits to saving ... no compounding, no long-term growth

There is no swindle involved.

Nobody suggests current accounts as long-term investment vehicles.

There is compounding, however small, even within 12 months if you set it up so compounding can happen.

The cap is currently £50,000 for sole accounts - a lot more than most people would need in cash but it's there for those who do need it, for whatever reason they might need it.

Ryan_Futuristics wrote: »

It's just e.g. £78 from TSB if you put £2k in move £6,000 through it with direct debits ... £71 from Tesco bank

Getting £149 a year after BR tax from £5,000 is surely better than any savings account would pay? Why are you seemingly not able to accept that people want to keep some of their money in ready cash, e.g. for their emergency fund, a holiday, a house deposit etc, and whilst doing so, want to get max interest?

BTW, you would not use Direct Debits for the minimum deposits required by the TSB or Tesco (or any other) current accounts but then you do like to use incorrect information.

Ryan_Futuristics wrote: »

You'd do better grabbing a bucket of water and a sponge and offering to wash your neighbour's dogs

That's meant to be one of your other well-reasoned statements, I suppose.

Lastly, I have never seen you post a better, and viable, alternative for those who need to keep short term cash reserves.

thegreenone

£30,000 in premium bonds and the remainder in TSB or Santander current account.


We had £22,000 in premium bonds since August last year and won £125.00 (5 x £25). Not a lot but not to be sniffed at. Sadly it's all gone for building works on our house but it's worth some thought.