Savings & Investing - Financial Fool Needs Help!

PatelA

Hi Guys,
In a bit of a pickle at the moment.. I've happily been plodding along with my current account from Barclays and having my wage go in there and spending, and not really saving naff all.
However, I have about £5,000 to play aroun with to try and earn more from it.
My knowledge of the finacial market is poor and all I am thinking about right now is to stick a large chunk of it in a high savings interest account (HALIFAX offering 6.17% I think) and not touching it for a year or so to watch it accumulate.
I know there is options for stocks/shares/investment but I really don't have the knowledge to confidently go in these areas and see it as a bit of a gamble.
I've been reading the forums but it does get a bit confusing to be honest and I'm just looking on some genric (or maybe tailored if you guys have time) advice to set me on my way to earning more from what I have.
Thanks very much!

Aegis

Your best bet in terms of normal savers is to look for an instant access catch-free savings account like Icesave or ICICI. I believe the Halifax offers lower rates than both of these, and penalises you for more than a certain number of withdrawals a year.

You can also look into cash ISAs, and as a matter of fact these should be your first port of call when thinking about medium-term savings. Cash ISAs are tax-free and can still offer over 6% interest rates (equating to a normal saving account with a rate of 7.5% or more. You can deposit £3k in one this tax year and up to another £3600 in every subsequent tax year.

Combine one of these with a temporary home for the rest of your money before dpositing it into a second cash ISA and you'll be laughing

You're right to steer clear of the stock market if you're only looking to see what happens over a year. A year in the stock market IS a gamble unless you're a very experienced short-term trader actively managing your portfolio. For most of us, it wouldn't be long enough to smooth out the short term volatility with long term growth.