Need help! What do I do with 20k?

alanalea

Apart from the obvious of blowing it all on a super dooper holiday

I've been left a little over 20k. (At the moment it is sitting in my Halifax card cash account :eek: 4 years ago I defaulted on a student account payment and they won't let me upgrade to a current account) I have no other savings or investments- I've always lived near to the knuckle.

So I'm a bit out of the water, totally clueless about what I should do with the money to get the best return- or even what to avoid. Please be gentle all

MrExample

Halifax's interest rates, even on current accounts is appalling. You're not missing out on much by not having a current account.

It depends how long you're willing/able to lock the money away for. If you're happy to leave it for 5 or 10 years, consider investing (although that's a risky strategy for the short-term). If you might need the money at short notice, look into a high-interest savings account, or better yet an ISA.

Needless to say, if you have any debt, pay that off first and foremost. :-)

alanalea

Thanks for replying

All debts have been paid and the 20k is what was left over. I'm looking for something that I might need the money at short notice- so not a 5 year plan.

MrExample

You probably want to stick with a fairly safe option then. I would consider just sticking the money into a high-interest savings account. If you haven't got an ISA set up already, go for it now while we're still in the 2007/2008 financial year:

Assuming you have no ISA for this year, stick £3,000 into an Icesave (or wherever) ISA, and then in April (new financial year), add another £3600 (the allowance goes up in April I believe.) - this will give you a nice, safe, decent rate.

Then you could stick the rest into a standard savings account (I'd consider Icesave again), moving an additional £3000 over each year.

I won't offer any advice on more high-risk ideas, as I'm no financial expert.