What is the next step from a saving account?

Legacy_user

I have managed to save a bit from here there and everywhere and my savings are gaining interest in 2 savings accounts.

However, i am getting to the stage where, although i would hate to be without my savings, but i dont really need it. So i am wondering what is the next step up the ladder interest wise. I dont mind tying it up as long as the interest is going to be a step higher, and i dont take any major risks with it. I dont mind a little bit of risk but not foolish risks.

I dont own an ISA, as i dont pay tax and collect my interest gross.

Pal

Have you looked into fixed term saving bonds? If you are willing to lock the cash away for a year or two you can get higher interest rates.

The step up from that would be looking at alternative asset classes e.g. bonds, property, shares. All of these run the risk of losing money though.

System

Have you looked into fixed term saving bonds?  If you are willing to lock the cash away for a year or two you can get higher interest rates.

That sounds ideal for me!!!

The step up from that would be looking at alternative asset classes e.g. bonds, property, shares.  All of these run the risk of losing money though.

Although these are worth a thought, i think i would need my MrJudis full backing behind me. Since we dont agree on anything, i think i will give this a miss for the time being.

Thanks Pal

Unbelievable_2

Hey Judi

I read this with some interest 'cos I was wondering the same thing myself. I have tried equity based PEPs/ISAs in the past and wish I hadn't!

I have got a fixed rate 1 year bond at 5%. It matures soon and overall I suppose it will only have matched on average what you could get from variable savings with high rates over the same period. But if rates are peaking as some suggest then I will look for another one when the time comes. I suppose it's a case of being satisfied with the return rather than chasing the max all the time.

Anyway - good luck with your invetsment adventure - keep us posted when you decide

System

Aww shucks Unbeleivable!!!!

Does anyone know anything about this company?

http://www.income-direct.co.uk/highincomebonds.ink

Robert_Sterling_3

What rate are you getting on your savings at present Judi??

System

What rate are you getting on your savings at present Judi??

5.00 ING

5.50% Cahoot

3.33% (This account needs to be kept seperate as its the hardship fund, and I may need to dip into it if hubby goes through a lean patch at work.)

Pal

3.33% (This account needs to be kept seperate as its the hardship fund, and I may need to dip into it if hubby goes through a lean patch at work.)

Why not open another cahoot (or similar) account then? Just because it has to be kept seperate does not mean that it has to receive a lower interest rate.

Call yourself a moneysaver?!

Alan_Peery

I dont own an ISA, as i dont pay tax and collect my interest gross.

For this year, that makes sense. However, if there is a chance you'll move back into tax-paying status you may wish to consider one for the tax benefits on *FUTURE* years' interest. Once you've put it into the ISA wrapper, it stays there....

Reaper

Does anyone know anything about this company?

http://www.income-direct.co.uk/highincomebonds.ink

Sounds like a guaranteed equity bond. These plans are aimed at people like yourself who have spare cash but are nervous about the stockmarket.

The schemes vary a lot but generally they offer to protect your capital (sometimes not all of it or not if the stock market falls too much) while giving you stockmarket growth, however the growth may be less than the stockmarket has risen and dividend income is not likely to be included. Also you normally have to commit for a fixed period of time. These plans are always awash with important small print so you do really have to read through the literature and spot the catches.

If you are feeling braver then you could dip your toe in the water with a small sum of money in a defensive unit trust. An example is Investec Cautious Managed where no more than 60% of the fund is ever invested in equities, the rest is in fixed interest securities. Growth is unlikely to be spectacular but if the market rises I would expect it to outperform a savings account. Going through an internet discount broker would reduce your fees but you may well prefer to go to an IFA to discuss options.

Would I go for one? No - but only because I prefer to take more risk to get higher returns.

System

Call yourself a moneysaver?!

OI WATCH IT!!

We all have to start somewhere!! >:(