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  • FIRST POST
    • rorrim
    • By rorrim 6th Nov 19, 9:33 PM
    • 1Posts
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    rorrim
    Ideas for very short term (3 months) investments?
    • #1
    • 6th Nov 19, 9:33 PM
    Ideas for very short term (3 months) investments? 6th Nov 19 at 9:33 PM
    Hello everyone!

    Though I have followed MSE for a long time this is my first time ever posting on the forums. Your advice has been brilliant in the past so now it's my turn to ask my own specific question.

    My wife and I were planning on buying our first home in January but now the date has been pushed back to February 2020. As such we both have a high amount of savings (though I dont want to give an exact number it's pretty high) and we would really like to make the most of them in the next 3 months! Does any one have any suggestions on where to get the biggest return? To be clear, we need to be able to access the money in February 2020 so fixed ISA's and annual interest accounts don't really apply here. Plus we already have help to buy ISAs

    My first thought was premium bonds though I know Martin himself is sceptical of them, given the time frame I think they seem my best bet? An ideas would be greatly appreciated!

    Many thanks
    Rorrim (username)
Page 1
    • AnotherJoe
    • By AnotherJoe 6th Nov 19, 9:50 PM
    • 16,374 Posts
    • 19,677 Thanks
    AnotherJoe
    • #2
    • 6th Nov 19, 9:50 PM
    • #2
    • 6th Nov 19, 9:50 PM
    NS&I.
    Issue with PB's is (AFAICR) you don't get the first or the last month so you'd only be getting 1/3 of the average return unless you were very lucky ([very) . With Ns&i you'd get interest for the whole time you were invested.
    Last edited by AnotherJoe; 06-11-2019 at 10:40 PM.
    • colsten
    • By colsten 6th Nov 19, 9:58 PM
    • 11,301 Posts
    • 10,673 Thanks
    colsten
    • #3
    • 6th Nov 19, 9:58 PM
    • #3
    • 6th Nov 19, 9:58 PM
    If it's less than £85K each, you could consider Marcus

    BTW, investing is a 5-7 year undertaking. What you are after is saving, in one or more instant access accounts.
    • Thrugelmir
    • By Thrugelmir 6th Nov 19, 10:31 PM
    • 65,939 Posts
    • 58,048 Thanks
    Thrugelmir
    • #4
    • 6th Nov 19, 10:31 PM
    • #4
    • 6th Nov 19, 10:31 PM
    With a 3 month window and a requirement to access the funds on demand. Cash savings accounts is your only real option. Premium bonds if you fancy a flutter. Where is the money deposited currently?
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • Aretnap
    • By Aretnap 6th Nov 19, 10:33 PM
    • 3,525 Posts
    • 3,140 Thanks
    Aretnap
    • #5
    • 6th Nov 19, 10:33 PM
    • #5
    • 6th Nov 19, 10:33 PM
    Does putting the money in a savings account, then using the interest to buy scratchcards sound like a good idea? If so, premium bonds are a good way of saving yourself the effort of going out and buying the scratchcards.

    Otherwise just put the money on the highest interest instant access account you can find - MSE has a list of the current best buys.

    Do not keep more than £85K each in a single institution as above that amount you don't have a 100% guarantee of getting your money back in the event of the bank going bust. If you have more than £85K each then either split it between more than one account with more than one bank, or put it in NS&I which has a slightly lower interest rate than the best buy savings accounts but is 100% guaranteed by the government
    • shinytop
    • By shinytop 7th Nov 19, 6:59 AM
    • 592 Posts
    • 670 Thanks
    shinytop
    • #6
    • 7th Nov 19, 6:59 AM
    • #6
    • 7th Nov 19, 6:59 AM
    If you definitely don't need the money for 3 months (95 days actually) you can get 1.8% from an Investec notice account. Otherwise easy access from the likes of Marcus is as good as anything.
    • newbinvestor
    • By newbinvestor 7th Nov 19, 9:30 AM
    • 218 Posts
    • 43 Thanks
    newbinvestor
    • #7
    • 7th Nov 19, 9:30 AM
    • #7
    • 7th Nov 19, 9:30 AM
    Why does Martin Lewis not like Premium Bonds? I'm personally a big fan.
    • aesthetic
    • By aesthetic 7th Nov 19, 9:45 AM
    • 8 Posts
    • 1 Thanks
    aesthetic
    • #8
    • 7th Nov 19, 9:45 AM
    • #8
    • 7th Nov 19, 9:45 AM
    Does putting the money in a savings account, then using the interest to buy scratchcards sound like a good idea? If so, premium bonds are a good way of saving yourself the effort of going out and buying the scratchcards.
    Originally posted by Aretnap
    That's not strictly true is it.

    When you spend £1 on a scratchcard, you don't get the £1 back, it is spent and gone forever. With Premium Bonds, the £1 is still yours. I know the odds are rubbish and you can invest the money much more wisely elsewhere, but using your scratchcard analogy -- if you have 50,000 Premium Bonds, it is effectively like having 50,000 free scratchcards on the first of every month.
    • ColdIron
    • By ColdIron 7th Nov 19, 10:06 AM
    • 5,511 Posts
    • 7,552 Thanks
    ColdIron
    • #9
    • 7th Nov 19, 10:06 AM
    • #9
    • 7th Nov 19, 10:06 AM
    You are confusing the cost of the scratch card with the capital in the savings account (which remains yours). The analogy holds true
    • aesthetic
    • By aesthetic 7th Nov 19, 10:22 AM
    • 8 Posts
    • 1 Thanks
    aesthetic
    You are confusing the cost of the scratch card with the capital in the savings account (which remains yours). The analogy holds true
    Originally posted by ColdIron
    Having re-read it, I see what you mean. OP wasn't proposing spending the capital, only the interest. I'll shut up!

    Although I do like my analogy about the Premium Bonds too. I find myself regularly winning on them too. I've had the maximum amount for over 2 years and I've only drawn a blank month a couple of times in all that time. My winnings have worked out at about 1.3%, which isn't brilliant I know, but there is always that *chance* you can win big. The odds of winning a million are about 1 in 69k I believe?
    • ColdIron
    • By ColdIron 7th Nov 19, 10:54 AM
    • 5,511 Posts
    • 7,552 Thanks
    ColdIron
    About that, over a year. See what the MSE article says about it
    https://www.moneysavingexpert.com/savings/premium-bonds/#tips-8

    I had the max in PBs but moved it out in 2012, never regretted it
    • eskbanker
    • By eskbanker 7th Nov 19, 10:55 AM
    • 11,916 Posts
    • 14,726 Thanks
    eskbanker
    My first thought was premium bonds though I know Martin himself is sceptical of them, given the time frame I think they seem my best bet?
    Originally posted by rorrim
    Why does Martin Lewis not like Premium Bonds? I'm personally a big fan.
    Originally posted by newbinvestor
    I wouldn't describe his position as sceptical as such, just keen to ensure that people go in with their eyes open and aware of the alternatives.

    https://www.moneysavingexpert.com/savings/premium-bonds/ explains key considerations such as the fact that holders shouldn't expect a return of the nominal 1.4% (and even that is generally beatable) and that their tax-free status isn't the benefit it used to be in the post-2016 PSA world, but ultimately concludes:
    Look at Premium Bonds with a clinical financial eye and they're only a good bet as a serious place to put savings if you're lucky, or you're a higher- or top-rate taxpayer who has used up their personal savings allowance, cash ISA allocation, and top bank savings accounts.

    Even though many rates have dropped, the top bank savings accounts will all still smash the pants off Premium Bonds, unless you've extremely good luck. And even the top cash ISAs and normal savings are usually likely to pay higher returns, even though their interest rates are actually lower than the Premium Bonds rate, it's a lucky person who'll actually break even with that rate on Premium Bonds.

    Premium Bonds are all about your mentality. They do protect your cash, so even if the returns don't look a good bet, it's fine to put a non-significant portion of your money in them, provided you're aware it's more for fun than returns. Before deciding, use the calculator to look at the real odds. If you're willing to take the gamble after that, then it's fine.

    Many people often think: "I'm likely to get about 1.4% and there's a small chance of winning a million". But the main point is that this isn't correct. You're actually likely to get quite a lot less than 1.4%, and there's a negligible chance of winning a million. If you know and you're OK with this, then investing in Premium Bonds isn't a bad plan.
    • aesthetic
    • By aesthetic 7th Nov 19, 11:23 AM
    • 8 Posts
    • 1 Thanks
    aesthetic
    About that, over a year. See what the MSE article says about it

    I had the max in PBs but moved it out in 2012, never regretted it
    Originally posted by ColdIron
    Interesting read. The Premium Bonds are one portion of my investments, a portion I am happy to "risk", so this: "...then you can factor in "the chance of winning large" as an additional fringe benefit of Premium Bonds, and it wouldn't be too bad to let that sway your decision marginally." is pretty much my thinking on it. If I only had Premium Bonds, I would definitely reconsider.

    Out of interest, what did you move the money into instead?
    • ColdIron
    • By ColdIron 7th Nov 19, 12:17 PM
    • 5,511 Posts
    • 7,552 Thanks
    ColdIron
    An AA 2 year fixed term bond at 3.85%. Those were the days
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