Where to invest £60K

VinsterDJ

Hi,

just asking for your opinion on this ... my cousin has sold her house and is now renting. She has £60k to put somewhere safe, with good interest and relatively easy access for when she buys a house.
She's asked me where to invest it, I don't have a clue to be honest, so I thought here was the best place to start.

Any tips?

Thanks.

Liz_the_Whizz

How long before she needs the money or is it a matter of when she sees somewhere she wants to buy?

If it's 6 months to 1 year, she could go for a fixed term bond with eg Kaupthing or ICICI @ 6.85%. She would need to open the easy access but high interest accounts (6.5% and 6.41% currently) with each to access the bond. She could use these instead if she does not want to tie the money up.

If she is of a nervous disposition, she may wish to split the money and put £30k into each separate bank to ensure she is covered by the FSCS compensation if the bank goes bust.

dunstonh

Invest of save?

It sounds like save from your comments but you do say invest. Can you clarify which it is please so the responses match what you want.

jamesd

See Where would the Smart Money Go? (What to Do With £32k).

VinsterDJ

I mean save rather than invest ... less risky for her.
She's signed a rental agreement on her flat for 12 months, so this is the minimum amount of time it will be in an account.

Thanks for your input so far ...

Tricia_Mc

Definitely split the money between 2 separate institutions, not more than £35K in each - why take the risk?

A 1 year fixed rate bond would give a better interest rate (at the moment) than variable rate, who knows if that will be true for the whole year. It may be a good idea to split the money between a fixed rate 1 year bond and a variable rate savings account.

Pick the accounts with the best interest rates from the list on this site, or other site such as moneysupermarket, then check the forums for comments on reliability, customer service, eg I have seen comments that Icelandic banks such as Kaupthing are a bit risky, Northern Rock style, but I have no idea whether there is any truth in that, and I know that some people (including myself) have had problems operating the ICICI Hisave account (but others are perfectly happy with it).

Personally I would probably go for Anglo Irish 1 year fixed rate bond, and a variable account with either Principality BS, Bradford and Bingley or Icesave. It's a matter of personal choice. I have invested in all of these recently as I am similarly parking the proceeds of a property sale. Principality are lovely and helpful on the phone.

Steve_xx

Don't forget to get an ISA if you've not already got one. You can put £3000 in that before April 5th and £3600 after April 5th, ie in the new tax year. Interest on ISA's is not taxed.