£6k to invest for 5 months

13Kent

We are some of those lucky people for whom lockdown has seen an upturn in finances, not paying for school buses, hubby not paying travel to work costs due to working at home, and an upturn in my income due to increased online work have meant for the first time in years we seem to have excess money each month and actually have a little pot of spare cash.

We have a credit card on 0% interest with approx 6k to pay on it. The 0% ends in Sept.

I have the 6k to pay it in my Isa but it is only getting 0.4% interest. (I have about 9k in total in the ISA)

My everyday saver account ( currently has about £2 in as I am transferring any spare money each month into to my ISA) is getting only 0.01%.

I have a monthly regular saver at 1.5% but that is already up to the £200 a month max payment.

We also have a stocks and shares isa with about 5k in it which has a regular £250 a month going into it. That's our rainy day fund which just sits in the background and we don't touch it and is there for emergencies. 

Our current accounts no longer pay any interest so any excess money each month I'm putting into my ISA at the moment. We are also expecting a tax rebate of about 3k so will be looking for somewhere to put that when the tax man finally decides to pay it into our account! The plan is to buy a newer car once working from home comes to an end (but feel there is no point in buying a car just to have it sat on the drive - may as well have the old one sitting there for a while longer). So we don't want to lock the money away but would like some advice on where best to earn interest while we are deliberating about how to spend it.  

george4064

For 5 months, you should not invest that money. Remember, whatever you invest you could get back less after 5 months.

I would suggest sticking the money in premium bonds or the best top paying easy access savings account.

ZeroSum

For the sake of 5 months, having the cash in an instant access savings account or current account is the best option.

Theres a few maybe better options like opening the virgin current account to get 2% on £1,000 then other £5k in Lloyd's club account to get 0.72% but do need 2 DD's for this

Alexland

As above Virgin Money M Plus current accounts.

Also if you have any current account(s) not offering you anything consider switching to Halifax etc for an incentive and ongoing benefits.

TheAble

By far your best option is to pay off the credit card. It might be 0% but you don't want that stuff on your mind. Pay it off and free yourself!

kinger101

Stocks and shares are too risky, so you need to leave it an an account you can access instantly.

Even if you found and account that paid 1 % it would mean getting £25 interest (compared to £10 if you put it in your ISA) over the 5 month timeframe.  So if I did make any changes to my banking, I'd be looking at what works best longer term.

But doing nothing (or just paying off the credit card now) seems a reasonable option to me,

FatherTireseus

I agree with george4064; the UK stock market FTSE 100 index is now just over 7,000, a level it hasn't been at for over a year. It could continue to rise over the next six months but it could fall and you'll get less back. 

Premium bonds are an option but for £6k, chances are you won't win anything in a shorter time scale. Use the calculator on the main site to get an idea of the average amount you might win.  Remember you have to hold them for a clear month before they go into a draw; so if you bought them today you wouldn't get entered into a draw until June.

Personally I'd probably go for finding an instant access account as a home for the short term.  I like Marcus by Goldmine Sachs (despite their interest rate cuts it's still one of the better paying instant access accounts).  And their withdrawals really are instant,  not next day as some seem to be; and you get a text and email confirmation of withdrawals straight away. 

Billycock

FatherTireseus said:

I agree with george4064; the UK stock market FTSE 100 index is now just over 7,000, a level it hasn't been at for over a year. It could continue to rise over the next six months but it could fall and you'll get less back. 

Premium bonds are an option but for £6k, chances are you won't win anything in a shorter time scale. Use the calculator on the main site to get an idea of the average amount you might win.  Remember you have to hold them for a clear month before they go into a draw; so if you bought them today you wouldn't get entered into a draw until June.

Personally I'd probably go for finding an instant access account as a home for the short term.  I like Marcus by Goldmine Sachs (despite their interest rate cuts it's still one of the better paying instant access accounts).  And their withdrawals really are instant,  not next day as some seem to be; and you get a text and email confirmation of withdrawals straight away. 

I wish it was a Goldmine, but it aint!

wjr4

Repay the debt and don’t use your stocks & shares isa for emergencies. That is the opposite of what you should be doing. Cash is for emergencies. 

dunstonh

Don't forget that borrowing more than 50% of your credit limit creates a negative on your credit record.   So, if you plan to borrow in the near future, you could be doing so much more damage than good.

billy2shots

Flatulentoldgoat said:

Pretty much guaranteed to make money on Crypto right now. DOGE has just shot through the roof. Your 6k would now be 13k. Plenty of other coins (XRP, Tezo's) or just plain old Bitcoin. There's literally 0 chance you'll be worse off.

If there's 0 chance would you be willing to guarantee that?

I will give you some money and you will guarantee making me a profit. For your trouble I will pay you 25% of the profit. 

Obviously if the stock drops in value you still need to return my full stake.