Is 4k worth investing or leaving as cash?

sand_hun

In a Freetrade ISA if I leave approx 4k sitting in cash I gain monthly interest of between £9 to £12 per month which kind of offsets their monthly fee.

Would it be smarter to invest that 4k in something I'm confident will go up, think big tech stocks like Amazon, or to leave it sitting in cash for the whole year? Thanks

dunstonh

It is normal to retain a cash float in a platform. The size of the cash flow will depend on the amount you have invested.It will also depend on whether you have income units or accumulation units. And how the platform, or if the platform, will sell units to cover fees. The level you have is down to personal preference but many people have one or two years' worth of fees as a level of choice.

Newbie_John

Freetrade pays 3.5% on up to £3000 cash right?

If that cash sits there just to pay the fees then I would go for something like Fidelity Global Dividend Income Monthly - it does both, generates similar monthly income to pay fees and holds potential for growth.

Worried_fool

Check your level of Freetrade membership: depending on your annual fee, you may not receive any interest on part of your cash.

Albermarle

https://forums.moneysavingexpert.com/discussion/6670065/is-4k-worth-investing-or-leaving-as-cash

If you are that confident, then you should invest it in Amazon or similar. Of course your confidence may turn out to be misplaced…….

sand_hun

Yes, that's right. Freetrade pays 3.5% interest on up to £3000 of invested cash. I currently have £4000 in cash.

The account type I have is FreeTrade Plus. I'm just wondering if I could make better gains by investing it in safe stocks

Nebulous2

You pay your money and make your choice, as the saying goes. Make sure you have an emergency fund in place first, before investing.

Remember - this doesn't have to be a binary, either or choice. You can do 50/50, 30/70 or any other combination which takes your fancy.

If you only get interest on the first £3k I'd certainly be moving the other £1k - either invested or moved somewhere which did pay interest on it.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82014350#Comment_82014350

There is no such things as safe stocks. Investing is about taking a risk with the hope of making a better return than safe savings. Investing in individual shares is particularly risky, whoever they are.

jimjames

Would it be smarter to invest that 4k in something I'm confident will go up, think big tech stocks like Amazon, or to leave it sitting in cash for the whole year? Thanks

It would a very bad idea to invest money that you need in the next 12 months.

dunstonh

https://forums.moneysavingexpert.com/discussion/comment/82014350#Comment_82014350

In your first post you talk about tech stocks, which are very high risk in terms of volatility. Ninety percent loss potential is within their capability. Now you're talking about making better gains by investing in safe stocks. You need to decide what it is that you are looking to achieve.

Also, are you referring to cash to make interest or cash that is just needed to operate the platform? It's currently unclear.

sand_hun

https://forums.moneysavingexpert.com/discussion/comment/82014507#Comment_82014507

Nothing has changed. I consider the likes of Amazon and Nvidia to be 'safe' growth stocks that are within the tech category.

I have a FT Plus account which costs £12 per month. By leaving some un-invested cash in the ISA, I gain interest of 3.5%. That roughly covers some of the £12 per month fee I have to pay - does that make sense?