Halifax say they are best ??

great_dane

Hope someone can help ( 2nd post & no one seems to answer)....We are selling our aunts house for 200,000K ...we need to invest this to cover the losses we will incurr ( tax credits) we have been informed TODAY by the Halifax that investing this amount with them ..will bring us ( after tax) £193 per week ....We don't mind investing long term ( up to 5 yrs) ...we would prefer the interest weekly/ monthly as we both are on low wages ....Could the readers who know more about SAVINGS than we do advise us PLEASE before we 'sign up' .....no idea about banking , interest rates ec ...so any 'kind' advice would be great ....THANKS !! ......

robp

I would suggest meeting an Independant Financial Adviser who can give a more balanced judgment about who is 'best' at investing your inheritance.

Rule 1: Never trust a tied bank advisor

debbie42

The fact that the Halifax are being so specific with the income implies to me that it's a savings type investment. To compare these with other accounts is just a question of checking the interest rates: the AER is the thing to look for, as long as other t&c are similar.

One of the leading easily available rates at the moment is ICEsave, which is paying 6.3% AER, I think.

The monthly income thing is a bit of a red herring as you can opt for a yearly paying account and still just dip into your savings as and when you deem it necessary.

WIth such a large amount to invest, I'd be seeking the help of a good IFA. There are plenty of discussions on here regarding how to look for one. Do a search for IFA and NMA to help narrow it down as that crops up regularly in threads.

Oh, and have you used this year's ISA allowance? That's the obvious place to put a wee bit of it!

<edit>
Forgot to say: I bank with the Halifax, but put most of my savings elsewhere as their "normal" savings rates aren't competitive. Sainsbury's bank are closely allied to them and can offer 6.25% AER. It would be interesting to know what rates they use to claim they are "the best"?

dunstonh

Halifax investment products (like all the banks) are poor value. I am not even sure Halifax have an investment fund that beats sector average so I doubt they are saying they are the best. Plus, many of their funds dont have long histories so there isnt much to go on there.

great_dane

Thank you for your advice , Really appreciate it ! Looks like I need to find an IFA ....we are just so ignorant to 'savings' never having had any !! worked so hard , had to finish work to look after our new baby , having to claim tax, working credits .....& now this inheritance ( which is fantastic ...although sad for the loss of our Aunt) so now we find ourselves having the £85 ( per week) tax credits stopped ( understandable) BUT need to find this with the interest from the 'estate' .....feel quite frightened about all of this to be quite honest ...just no idea who to ask for 'HONEST' advise & to try & do the best for our future ....Thanks for taking the time to help !! any more onfo on the best/ safest accounts would be great !!

dunstonh

An IFA is an investments adviser. Not a savings account adviser.

If you want to invest the money, then thats fine. If you want to stick it in a savings account then an IFA isnt really going to do a lot for you apart from get their copy of money facts out and tell you which rate currently looks good.

That said, if you want to get the best out of the money over the long term then investing some of it does make sense as savings accounts are great for short term but long term is not ideal. Especially if you are going to draw the interest as well as that will see the capital in the savings account lose value in real terms. If you draw all the interest then £200k will be worth around £140k in 10 years due to inflation. In 20 years that will be around £98k.

Darth_Calculus

I agree with Debbie42, that the product Halifax are suggesting seems to be a savings product. In fact, if you take £200,000, and use an interest rate of 6.3% you get:

£200,000 x 6.3% = £12,600. Deduct tax of 20%, and you get £10,800. Divide this by 52 and you get £193.85.

Coincidentally, 6.3% is the rate of their Guaranteed Reserve account.

I would suggest that you can get a better rate than this with other bond providers, if you are looking to stick the money away for a year or so.

Like Dunstonh says, if you wont be touching the money for 5+ years, then investing it would be better than a savings account, as the return should be higher.

If you might need the money at any time, then a savings account would probably be better.

Of course, since it is such a large amount of money, a combination of the two (part savings account, part investment might be the best answer). You could, for arguements sake, put £20k into an instant access account paying 6.3%, £30k in a 1 year bond paying 6.7%, and £150k in an investment vehicle yielding a higher return.

(Of course, your split of funds will be different, depending on what you think the likelihood of you needing some of the money might be, etc).

Unless you are thinking of spending it all in the next five years, I would think about seeing an IFA. :-)