Got £100k To Save-need Advice

brengti

as the title says, i have £100k that i want to save. i dont need to touch it again for a long time so would be up for putting into a account for say 5 years without making any withdrawals etc and want to know the best way of gaining the maximum amount of interest on it.

can anybody help with some advice on where to go, what interest rates are going to be fixed etc etc

thanks for you help!

Bren

Hungerdunger

The problem you have for a five year investment is forecasting what will happen to interest rates over that period. The general feeling is that the Base Rate will drop another half of one percent during the course of this year, but I doubt whether many people could bet confidently on what will happen from 2009 onwards.

Personally, if I was investing that money now, I'd be looking at either a one or two year fixed-rate bond. If you go here, you can fill in your criteria and get an idea of what is on offer.

Jonbvn

Five years is a bit too short for stocks and shares. If longer then stocks & shares would be better.

Perhaps an IFA would be a good idea?

baldbloke_2

£30k NS&I Index-Linked Certs 3yr and 5yr.
£35k Fixed Rate Bonds - split between 1yr and 2 yr - keep repeating
£35k Instant Access or Notice variable account - the best you can find that you feel comfortable with.

Also transfer the maximum into a cash ISA each year from the variable account. It all helps.

All suggestions are subjective and take no account of a person's circumstances or plans. If in doubt play safe!

But being in a similar situation to yourself I have gone for the above split - and added £30k Premium Bonds which will produce considerable derision on this forum because of the lowish rate. But hey! who knows?!

I would tentatively suggest £5k to £10k in Equities to add an element of real uncertainty -although it would represent up to 10% of your capital - that may seem a lot. Over 5 years you have no way of guaranteeing an adequate return but it might provide some brainfood along the way. I have blown hot and cold on a weekly basis over that part of my own suggestion.

It's all down to your acceptance of risk and how much you need to emerge with in 5+ years time. Good luck.