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I have £1000 to invest just for 31 months...
FilledWithLight
Posts: 12 Forumite
So I have a credit card and have spent £1000. I have now saved up the £1000 to pay off the debt but no interest will be applied for 31 months, so I'm thinking that instead of paying it straight back I could invest the money until then. I have never invested money though and don't know where to start. Any suggestions on what kind of return I could expect and what type of investment would be the best yield for this amount of time?
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Do you mean invest or save? Investing implies risk and is normally only worthwhile for 5-10 years.
Savings are safe, unexciting, but depending on how you do it - saving accounts, interest paying current accounts or p2p accounts, or p2p/savings accounts with cashback/referral bonuses - could gain you 5% plus
(just to clarify - p2p is risky too, not conventional savings but usually ok shorter term than conventional investing, usually...)0 -
!!!8220;5% plus!!!8221; from a savings account?! You would be lucky to get that return from investing!
I was referring to saving, or interest paying current, or p2p accounts.
5% is perfectly possible with current accounts for £1000. And with p2p. And more if the accounts used have some cashback or referral bonus.
Even a savings account with bonus can get effectively more than 5% on modest amounts - e.g the current offer from Raisin who offer a £50 cashback on £1000 deposit in a 2% savings account. That's an effective 7% on £1000.0 -
Don’t forget you will still need to pay the minimum amount on the card, which will vary and failure to do this could result in the interest free period being taken away.0
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I agree with looking for the best interest paying current accounts, but for someone who have never even invested before I think P2P is far too risky.I was referring to saving, or interest paying current, or p2p accounts.
5% is perfectly possible with current accounts for £1000. And with p2p. And more if the accounts used have some cashback or referral bonus.
Even a savings account with bonus can get effectively more than 5% on modest amounts - e.g the current offer from Raisin who offer a £50 cashback on £1000 deposit in a 2% savings account. That's an effective 7% on £1000.0 -
Thanks everyone. The Raisin savings account might be the way to go but I do like the thought of investing. Maybe just a low risk. What is P2P?0
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Are you comfortable losing some of the money and not being able to repay the credit card in full? What about the minimum monthly credit card payments - where will they come from?FilledWithLight wrote: »Thanks everyone. The Raisin savings account might be the way to go but I do like the thought of investing. Maybe just a low risk. What is P2P?I am an Independent Financial Adviser (IFA). Any posts on here are for information and discussion purposes only and should not be seen as financial advice.0 -
FilledWithLight wrote: »Thanks everyone. The Raisin savings account might be the way to go but I do like the thought of investing. Maybe just a low risk. What is P2P?
P2P is peer to peer lending - it is not low riskI’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
I can manage the monthly repayments. I didn't know P2P wasn't low risk. I don't have any experience of investing so don't know where to begin0
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FilledWithLight wrote: »I don't have any experience of investing so don't know where to begin
Don't. Not for such a short term.
I'd be following Zanderman's advice and looking at keeping it as cash, and maximising the return with no risk to the capital (in this situation).
Unless of course you can still afford to pay the CC bill if your £1000 has dropped in value to £500, or less, in 31 months time? But then if you can, I'd be investing for the long term anyway.0 -
FilledWithLight wrote: »I can manage the monthly repayments. I didn't know P2P wasn't low risk. I don't have any experience of investing so don't know where to begin
With P2P you are lending money directly to a borrower or range of borrowers. Many of these are people who cannot borrow from mainstream providers - as a result there is a risk that they will default and not pay you back so your capital is at risk.I’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0
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