I have £1000 to invest just for 31 months...

FilledWithLight · 11 July 2018 at 8:54PM

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?

Zanderman · 11 July 2018 at 9:07PM

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...)

Zanderman · 11 July 2018 at 9:40PM

AFF8879 wrote: »

!!!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.

MDMD · 11 July 2018 at 10:45PM

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.

Audaxer · 11 July 2018 at 10:48PM

Zanderman wrote: »

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.

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.

FilledWithLight · 12 July 2018 at 11:15AM

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?

wjr4 · 12 July 2018 at 11:26AM

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?

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?

MallyGirl · 12 July 2018 at 11:52AM

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 risk

FilledWithLight · 12 July 2018 at 12:44PM

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

mije1983 · 12 July 2018 at 1:08PM

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.

MallyGirl · 12 July 2018 at 2:37PM

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 have £1000 to invest just for 31 months...

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