Advice please...15k savings...

Skilzzz · 11 January 2018 at 1:27AM

Hi guys...just joined the forum and am looking for some advice.

I have £15k in savings that i am keeping for the kids for when they are older. Its just in my current account atm...what would be the best thing to do with it in terms of savings account, etc. Obviously i can keep it locked away for a good few years but want investment with no risk of course.

Is it best to just open a 5 year fixed rate bond with someone like Paragon...or spread money out in different accounts that pay higher. I do realise that most of these high interest rate accounts require monthly payments and direct debits and such, which is what has put me off them.

Any help will be much appreciated.

Thanks

Dazed_and_confused · 11 January 2018 at 2:07AM

Your post is a little confusing.

Do you want to invest the money or have it 100% secure and just get the best savings interest rate possible?

Alexland · 11 January 2018 at 7:58AM

I get the feeling the OP wants to save rather than invest and already understands the options. I am confused if this money is definitely for the kids or potentially also a rainy day fund being in a main bank account.

Yes there are 5% regular savers if you are willing to operate multiple bank accounts and keep cycling the money around. It's best to offset the opening dates across the year to try and keep a rolling balance across the accounts.

Still it's hassle and some people don't value the higher interest enough to bother. Also you've got to accept a lower interest rate on the money when it is not in the 5% accounts.

Skilzzz · 11 January 2018 at 9:14AM

Sorry for the confusion...just want the best interest rate possible tbh. Would not need the money for anything else...its just for the kids future.

These rates of 2.5% for a 5 year fixed aren't going up anytime soon i guess?

somethingcorporate · 11 January 2018 at 9:42AM

Skilzzz wrote: »

Sorry for the confusion...just want the best interest rate possible tbh. Would not need the money for anything else...its just for the kids future.

These rates of 2.5% for a 5 year fixed aren't going up anytime soon i guess?

Probably not although if you are willing to put some time in to it you can beat that with a number of current accounts and regular savings accounts.

RG2015 · 11 January 2018 at 10:05AM

Skilzzz wrote: »

Obviously i can keep it locked away for a good few years but want investment with no risk of course.

Skilzzz wrote: »

Sorry for the confusion...just want the best interest rate possible tbh.

These rates of 2.5% for a 5 year fixed aren't going up anytime soon i guess?

Risk is not always easy to quantify. If you save £15,000 in a 5 year 2.5% account it will be worth £16,971 in 5 years. However inflation will erode the value of this in five years time. If inflation remains at 3% then the true value of the £16,971 will be £14,639.

It is unlikely that 5 year rates will increase much in the near future, but in 2 or 3 years they probably will go up. Inflation is another matter but the government is committed to keeping this down so it really should not increase much over the next five years. But nobody can possibly know for sure.

25 years ago my baby daughter was given £1,000 by my mother and I invested this in a tax free fund which was automatically converted into a stocks and shares ISA when these replaced the original scheme. It is now worth £6,600 which I believe is slightly ahead of the FTSE 100 growth over this period. However the FTSE is riding high at the moment and many fear a fall in the near future. Hence investing in a S&S ISA now may be more risky in the short term.

Sorry if this has become a bit complicated but these are the basic issues as I see them and sadly there is no simple answer. For what it is worth I currently favour the NS&I 3 year bond at 2.20% and in 3 years we should know a bit more about how Brexit will be affecting inflation and savings rates.

xylophone · 11 January 2018 at 12:05PM

Do your children have CTF/JISA?

The Coventry JISA currently pays 3.5%.

You might wish to make each child a gift of some of the cash?

Otherwise, (assuming you have not already done this), you and your wife might each open a Nationwide Flexdirect current account, deposit £2500 in each, and a joint Flexdirect account and cycle in/out £1000 a month each from a non-NW account.

You would each have access to the Flexclusive monthly saver.

You might also each open a TSB Plus current account and a joint account - you would deposit £1500 in each and perhaps use these for the cycle in/out to TSB.

Otherwise

http://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

or Ns&I.

Alexland · 11 January 2018 at 1:19PM

RG2015 wrote: »

However the FTSE is riding high at the moment and many fear a fall in the near future. Hence investing in a S&S ISA now may be more risky in the short term.

I agree and that's why I didn't suggest S&S investments to the OP as, although it could still work out better in the long term if the kids are young enough, I got the impression they are risk averse and markets are looking a bit high at the moment so there's the possibility of an alarming drop in the next 6-18 months before an eventual recovery.

Alex.

Skilzzz · 11 January 2018 at 1:48PM

xylophone wrote: »

Do your children have CTF/JISA?

The Coventry JISA currently pays 3.5%.

You might wish to make each child a gift of some of the cash?

Otherwise, (assuming you have not already done this), you and your wife might each open a Nationwide Flexdirect current account, deposit £2500 in each, and a joint Flexdirect account and cycle in/out £1000 a month each from a non-NW account.

You would each have access to the Flexclusive monthly saver.

You might also each open a TSB Plus current account and a joint account - you would deposit £1500 in each and perhaps use these for the cycle in/out to TSB.

Otherwise

or Ns&I.

Thanks for the replies guys.

No they dont have trust funds or junior isa's.

With the Coventry JISA, i can only put in just over £4k in one of those right? And that 3.5% is a variable rate? How long is that going to stay at 3.5% if it is variable?

enthusiasticsaver · 11 January 2018 at 1:57PM

There are no guarantees with interest rates unless you go for fixed rate deposits. Junior ISA will pay better than normal savings accounts but bear in mind they will be in the childs control from the age of 18. If you plan on adding to the £15k you may be wary of having that amount of money in the control of a young adult.

If you have a low level of risk than stocks and shares may not be for you although undoubtedly in the long run the returns would be better but not guaranteed. The stock market is high at the moment though and noises about market corrections but that is sheer guesswork.

I think personally I would put some in JISA and some in fixed rate term deposit at the best rate you can get.

MallyGirl · 11 January 2018 at 2:09PM

Skilzzz wrote: »

Thanks for the replies guys.

No they dont have trust funds or junior isa's.

With the Coventry JISA, i can only put in just over £4k in one of those right? And that 3.5% is a variable rate? How long is that going to stay at 3.5% if it is variable?

Do you have £15k each or in total? A JISA needs to be in the name of the child so if it is £15k total it would need to be split anyway. And then you can put in £4k before April 6th and another £4k after.

Child accounts have better rates than adult ones. The rates do change - my DD's Halifax ISA was 6% for a while but then dropped to 3% but that is still better than pretty much everywhere else.

Advice please...15k savings...

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