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What to do with 50k?

emz
by emz 16 February 2010  |  Comments 1 comment  |  Love Love  0 loves

I have 50k to save and I need to know what my options are for it. This is my nest egg for use if I lose my job or have children etc. I have already paid a large sum off my mortgage.

Basically I need to be able to get to some of it in the short term but I am also willing to put a small amount (say 10-20k) for 3-5 years.

Interest rates are rubbish and I am tempted to chuck it all into premium bonds.

I do not want to risk losing the capital.

Any ideas?

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Comments (1)

  • MikeGG1
    Love rating 804
    MikeGG1 posted

    I would not recommend Premium Bonds as the prizes are equivalent to 1.5% after tax. There are plenty of places where you cam get a better rate.

    I assume from the possibility of having children that you are in a long term relationship and that the two of you are working and contributing to the home.

    I would suggest jointly having an emergency fund of 3 months joint net pay or 6 months net pay of the higher earner.

    This could be invested in an instant access account such as Coventry BS 1st class postal a/c @ 3.30% (including first year bonus) or Investec High 5 account which is a 90-day notice account and pays the average of the best 5 instant or notice accounts.

    The balance, I would suggest should be invested in a series of fixed rate bonds maturing at regular intervals. After each lot matures it can be reinvested for 5 years because the others will be filling the intervening period. You can get up to 5% that way, at the moment.

    Mike

    Posted on 16 February 2010 | Love Love  2 loves Report

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