inspiration for 4K

choppy-c

Greetings all,

I have £ 4000 & another £ 2 k in April & its just sitting in a current account since Spring.

I have various Isa & max these each year, pension is a bit boring & accesses same funds as ISA these days, my cash fund is ok at the mo & a few shares but trackers in Isa covers these again. (Another Divi yielding share for long term is bit attractive)

With 2 - 2.5 % as good as can get without all the santander type mucking about any interesting places to go with it ?

Dont mind tying up - medium risk fine maybe high OK (if appeals) best I can think of is a premium bond or peer to peer punt any pros cons or bright ideas would be gratefully received

Many thanks

JohnRo

What about an investment trust savings plan held directly with the provider?
You could expect approx 3-4% income per annum from your investment and the potential for capital growth to comfortably exceed that rate over a 10-20 year time frame.

bowlhead99

Of the choices given I would say premium bond is least interesting solution as the chance of any prize that you win being the million quid jackpot is literally about one in a million and with £4k invested you will on average only win 9 prizes over the next five years. So, call it 9 in a million over the next five years. Hardly exciting.

There are oodles of threads about the top rates available on current accounts and regular savers etc. £4k sitting in a current account at Lloyds at 4% or so would pay £160 a year which is over £100 more every year than you'd expect to get from PBs over 12 draws and Lloyds will give you some freebies like cinema tickets or a magazine subscription too. If you want some excitement you could then buy £100 of lottery tickets with the extra interest made and you could improve your potential rewards by buying more tickets on rollover weeks and fewer on non-rollover weeks.

If you already have sensible levels of emergency funds and put as much into investment isas and pensions with your boring safe long term investment growth stuff, and don't mind tying up, I agree it could be worth looking at at an interesting specialist investment trust or two? Either an up front investment or find one offering a cheap monthly plan as mentioned by JohnRo above.

Those sorts of companies / trusts can invest into all sorts of things depending on their strategy but a share in an investment company that (e.g.) invests into a whole bunch of Romanian companies is not necessarily higher risk than investing direct into a random UK company that happens to be able to afford to pay dividends at the moment.

Here are a three examples of investment companies
Private Equity
http://www.hvpe.com/~/media/Files/H/Hvgpe/documents/hvpe-sar-09-2015-v2.pdf
Specialist Real Estate
http://www.targethealthcarereit.co.uk/uploads/thrlannualreport2015web.pdf
Eastern European
http://www.fondulproprietatea.ro/sites/default/files/quarterly_report_q3_2015_final_0.pdf

I have all of those in my pension, and you would probably find them more interesting than a bank account if the idea is just to take a punt and accept you could lose some or all of the capital if things went badly wrong. Clearly a totally different level of risk than cash savings.

Or a peer to peer punt if you find any interesting ones (and can risk the capital).

colsten

2 - 2.5% isn't the best you can get for £4K - £6K from "Santander type mucking about". You should easily get closer to 4.5 - 5%.

https://forums.moneysavingexpert.com/discussion/5374614

choppy-c

Great thank you (always a help this place) I'll look into Those but investment trust fits the bill and quite interested in a flyer in India so much appreciated .

I hope the original post didn't sound off hand as not my intention seriously considered the Santander scenario and might still do that at some point
I have a Charles Stanley acc for the Isa so can purchase through that I guess,

JohnRo

choppy-c wrote: »

I have a Charles Stanley acc for the Isa so can purchase through that I guess,

Bear in mind you will be charged an additional fee annually to hold an IT with CSD, as you probably know they have a £20 minimum and £150 maximum fee threshold for stocks and shares held by them. That's the only reason I mentioned going direct, for just one IT with a relatively small amount it's the cheaper option.

Your £4000 or £6000 in April with CSD will have the £20 pa minimum platform fee applied. The 0.25% p.a. fee doesn't kick in until £8000+ and the platform charge for £60,000+ is then capped at the £150 maximum.

savings_my_hobby

I agree with Colsten. You have to put things into perspective. with say, £4501 in 3 separate accounts (nationwide flexdirect, tsb classic and halifax reward) a basic rate tax payer can earn £235.95 in a year. 5.24% return after tax is pretty good, (especially as inflation is -0.1%) Zero risk too. you could even open a tesco account and skim the interest into it and get another 3% gross and kind of simulate compounding.

This will be even better in April when the £1000 allowance comes in.

I can't speak for anyone else but £235 for opening a few bank accounts seems worthwhile to me... safe too.