25k .... oh happy days!

marksandsparksgal

Rightio, I was lucky enough to inherit 25k...I'm thinking ISA is the best way to go for the the 3k obv, and then I also have a Sainsbury's Internet Saver account (the one that was all over the place a while ago for giving such a good rate). Is this a good bet still or do we have some new high flying accounts I should be aware of?

Thanks in advance!

Aegis

Either Icesave or ICICI are now offering 6.41% gross interest, which is nice for a savings account.

If you're investing medium-long term, you might want to consider getting into some stocks and shares action, as that's more likely to achieve good capital growth in the long run.

You could also consider a few other options here and there, but it really depends what the money is for. Are you going to use it for anything specific? Are you just wanting it to grow as much as possible for an unspecified time? What is your current and likely tax position?

Etc.

Questions never seem to be simple when they're about finance!

marksandsparksgal

Yes sorry, I am still in shock that the money has turned up (have been stuck in a 2 year legal battle!)

Rightio, the money will be for a house deposit one day, probably in around 2 years when I graduate, therefore that limits long term investment.

I have a student loan of around 7k at the moment, but I understand I'm better off letting that run out over time as the rate is so low compared to that of a high interest account.

With regards to Icesave, I remember hearing a few things flying about a while back that since they're based in India the comeback if things go wrong is not good, but having checked their website out I see it's covered the the government financial compensation scheme, which means investments up to £35k are covered, is this correct?

Must say Aegis, I'm very impressed with the speedy reply! Usually I hang out on the student, DFW and OS boards, but I'll lurk here more often!

*edit* Forgot tax...oops. Although I'm now unemployed (on a gap year in Berlin), I believe I went over the tax free allowance, which is around 5k, and will be picking up another job next year so I don't think I have a leg to stand on as far as untaxed savings go, sadly!

Aegis

From what you've said, the cash ISA and high interest savings account option might be best for you. You could also consider looking in to one or two-year fixed rate bonds if you find one you like, but to be honest I don't know much about them and am not too sure how good they are for your position.

As you say, long term investing is pretty much entirely ruled out if you want to use the money within a couple of years, so I'd stay away from stocks and shares. That hugely limits the suitable product range, which should make it fairly easy to select the ones you want!

Jonbvn

Make sure you get your 3k cash ISA set up immediately, and then top it up (or get another one) with 3.6k in April 2008.

It is worth considering index linked savings certificates, provided you can tie some of your money up for at least one year. These are tax-free (In case you didn't notice my signature;-)

marksandsparksgal

Hiya J,

I already have an ISA with M&S (oh the loyalty to the ex employer), need to have a look at interest ratesand possibly transfer this, I belive it has roughly 2k in.

NSI certficates, how do you go about getting these? Post Office? Thank you for your reply.

Aegis, thanks again for the help.

isofa

marksandsparksgal wrote: »

With regards to Icesave, I remember hearing a few things flying about a while back that since they're based in India the comeback if things go wrong is not good, but having checked their website out I see it's covered the the government financial compensation scheme, which means investments up to £35k are covered, is this correct?

Icesave are part of Landsbanki - the Icelandic bank.

ICICI Bank (the popular HiSave account) is India's second largest bank.

Both now subscribe to the Banking Code (Icesave always was, I believe ICICI has recently signed up).

Hope that helps!

littlemissmoney

marksandsparksgal wrote: »

I already have an ISA with M&S (oh the loyalty to the ex employer), need to have a look at interest ratesand possibly transfer this, I belive it has roughly 2k in.

Don't forget you can still put £1K in an ISA this year then.

Edit: Assuming you put that £2K in this tax year. If not, put £3K in an ISA

egamar

isofa wrote: »

Both now subscribe to the Banking Code (Icesave always was, I believe ICICI has recently signed up).

The Banking Code (of Conduct) is not the same as the other thing whose name I now completely forget but is what gives you your guarantee up to £35k. Any Bank trading legally in the UK as ICICI do and always have, wherever they come from offers you the same protection. More accurately, they don't offer you the protection - some other regulatory body whose name I also forget does. There's probably bits I've missed out, but you get my drift, I hope ....

This has not been one of my better posts. Oh, how I hate Micro$oft!

isofa

egamar wrote: »

The Banking Code (of Conduct) is not the same as the other thing whose name I now completely forget but is what gives you your guarantee up to £35k. Any Bank trading legally in the UK as ICICI do and always have, wherever they come from offers you the same protection. More accurately, they don't offer you the protection - some other regulatory body whose name I also forget does. There's probably bits I've missed out, but you get my drift, I hope ....

This has not been one of my better posts. Oh, how I hate Micro$oft!

Yes you are correct, but many people have been worried about the ICICI Bank not signing up to the code, which is voluntary but shows they subscribe to good practices etc.

I believe you are refering to the FSA (Financial Services Authority) http://www.fsa.gov.uk/ and of course the 35K protection it now offers your account(s) with banks.

Which banks own which, indicating the coverage you'll get has been written about at length by Martin on the money pages on this site, so I won't go into further details!

meanmachine_2

marksandsparksgal wrote: »

I have a student loan of around 7k at the moment, but I understand I'm better off letting that run out over time as the rate is so low compared to that of a high interest account.

Isn't the interest on a student loan now 4.8%?

But yes, you're right. An account like icesave pays 5.04% after basic tax, which is still a better option than paying off your student loan.