What to do with my lump sum?

helenleicester

I have a 5 figure sum (less than £35k) to save/invest. The money was from a sale of the flat that my ex and myself lived in when we were together. I put down the deposit as the money was from inheritance. I am wanting to put it away so I can get some interest as waiting to see what is going to happen with the housing market. I would probably require the funds in 18 months or so time. I work full time and I am in my late 20s

dunstonh

Given your timescale you should forget investing. You need 5 years plus for that. Stick with savings options.

Ian_W

As a taxpayer you should use your cash ISA allowance first as the interest will be paid tax free. You can put £3000 in an ISA now and a further £3600 on 6/4/08 [new tax year]. There is a list of the best paying ISAs HERE.

For the rest, if you're sure you won't need it for at least a year then you could go for a fixed rate savings product, there are some good ones about at the moment and as interest rates look set to fall during the year you'll be locked into a better rate.

There is an article about savings HERE and it has links to help you search for the best up to date deals.

Toastie

Use the money to pay off the debts first then you could:

1) Put some in a high interest fixed account (Maybe the minimum £5000 in Kaupthing Edge for 6months)

2) Put the rest in a easy access account. (Maybe Kaupthing Edge with £1000 at 6.5% below that the interest drops below 1%)

3) You could just leave it in an easy access account in order too use it when you might need it which has a lower minimum requirement fee (Icesave 6.05% for £250 below that it becomes 0.5%)

Easy Access Accounts: http://www.moneysavingexpert.com/savings/savings-accounts-best-interest