Anything over 4% on such a small amount over a short time is now very hard to find.
The biggest growth potential in terms of cash is Premium Bonds - 5000 chances of winning a million every month, but the probability of winning is small.
You may pick up a few small wins over the year with a few thousand bonds.
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For somewhere safe to put £5000 that may see a return I'd say premium bonds. But I have more than that in bonds and in the last year got less than I would have done in an ISA. With interests rates now so low I'll leave it.... might win big on 1st March.
Edited by rtj70 on 12/02/2009 at 20:05
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I am NOT giving financial advice - I am not qualified and it isn't legal for me to do so! However, as a suggestion Google for ZOPA.
Edited by Armitage Shanks {p} on 12/02/2009 at 20:16
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£5K would give PG 10000 chances of winning a million - there are 2 x £1 million prizes per month according the Relevant website. Still long odds though I agree.
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I used to have £2k of Premium Bonds and, on the first day of one particular month about eight years ago, when I checked the winners on Channel 4 text, realised that I had the initial part of the winning million pound number.
That meant a fairly reasonable chance of the big win but, after checking, I found that I was about 140,000 odd numbers short of the winning combination (so someone had bought their bonds very shortly before me).
The feeling was so depressing that I withdraw all the £2k worth of Premium Bonds and spent it on a pile of new computer equipment, including some for the offspring, and felt very, very much better afterwards.
My feeling was that if I had come that close to the £1m without winning, it was a waste of time retaining the Premium Bonds, and that I might as well enjoy the benefits of spending the money.
Ironically, the chance of winning these days, even small sums, is drastically reduced.
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My wife has got more in winnings in the last 12 months than she would have got interest in a bank account. Lots of £50 and some £100 prizes.
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This site normally gives very sound advice.
tinyurl.com/5ewjm
Edited by drbe on 12/02/2009 at 20:49
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Investing £5k for around 6 months.
Following is not advice, just what I would think about and consider doing myself, and all IMO:
1. If any debts, pay those off, beginning with highest interest charges first [unless it is a tracker mortgage].
2. decide level of risk I wish to take, then have a flutter as below.
3. low/zero risk, go for premium bonds, which on average luck may yield about £100 over 6 months. If very lucky, a lot more. If less than average luck, then zero return but capital is safe.
4. high risk, then stock markets investing in low cost ETFs, but over a period of 6 months is a pure gamble.
5. medium risk, go for gold. At least you are unlikely to lose too much, and it is possible you will make a good return.
Again use ETFs. [ en.wikipedia.org/wiki/Exchange-traded_fund ]
To buy/sell Gold at minimum dealing charges [ overall should be 1% or less, i.e. £50 total ], get an ETF from an online dealer such as Selftrade.co.uk . One popular ETF is:
uk.finance.yahoo.com/q/bc?t=2y&s=GLD&l=on&z=m&q=l&...I
www.bloggingstocks.com/2009/01/02/top-stock-picks-.../
finance.aol.com/charts/spdr-gold-shares/gld/nys/cl...s
The risk is that everyone is piling in to Gold now, and this may be creating a bubble waiting to burst. Also, Gold is priced in Dollars, so there is a currency effect.
Say you buy x amount of Gold for $y:
If $ goes up in value, your x amount of Gold, goes up in £ value.
If $ gets weaker, then your x amount of Gold, goes down in £ value.
Edited by jbif on 12/02/2009 at 20:52
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Premium bonds - I've got loads and hadn't thought of that. Hmmm!
Don't think I'm brave enough for gold! Aiming for low risk, because this will either be used for a new car if I have to change jobs and give the golf back, or to make an advance payment on my mortgage so that I can take a payment break and retrain.
Thanks all (and don't worry, I am due to see the IFA again in the next couple of months because my mortgage fixed rate is running out...)
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Premium bonds - I've got loads and hadn't thought of that. Hmmm!
Probably because you haven't won - like me.
There is a maximum though - £20k?
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If you have a mortgage, what are you paying in interest terms now, hm? What you *are* paying is of course an opportunity cost.
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Let me invest it for you and I'll turn it into £25000 in six months.
Signed
B. Maddoff
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>>Let me invest it for you and I'll turn it into £25000 in six months.>>
I've got £55k to invest if you are interested...:-)
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I've got £55k to invest if you are interested...:-)
Meet me at the Old Abandoned Warehouse at midnight tomorrow. I'll be carrying a rolled-up copy of The Telegraph and wearing sunglasses. Cash, of course.
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>>Cash, of course.>>
When do I get the £25k back though?
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Regular (i.e. monthly deposit) savings accounts, funded by a standing order, currently pay in the region of 5% to 6% AER gross.
For example the "Halifax Regular Saver" pays 5% AER gross. It has a maximum monthly deposit of £500 (minimum £25) so £5000 could easily be paid into it during its 12 months duration. The amount of the standing order can be changed at any time ~ maximum £500 per month, minimum £25 per month. At the end of the 12 month period the balance plus interest is transferred to another (nominated) account that you have with Halifax, and the regular savings starts all over again for another year. If you make a withdrawal or miss a payment the account is closed and the interest rate is reduced to something like 0.5%.
Barclays "Monthly Savings" pays 6% AER gross, but there is a maximum deposit of £250 monthly and the rate reduces to 3.03% AER in a month that you make a withdrawal.
Martin Lewis is currently recommending these types of accounts in www.momeysavingexpert.com, and recently on TV.
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Martin Lewis is currently recommending ...........
He's also recommending that in the current financial climate you should review your savings monthly and move your money about as necessary to get the best rates of interest.
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Can I second the snail?
I did some limited research on this subject a couple of weeks ago and the regular savings accounts emerged as among the best on offer at the moment.
Barclays is the one to go for, according to what I was told.
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Hello Miss Pologirl
My name is Dr Nikodo Umbunga. I have 5 million dollars ($5,000,000) in a bank acount lodged at the First Bank of Nigeria.
Send me a western union money order for £5000 uk stirling and I will use this to open an account to transfer the 5 million dollars ($5,000,000) into an account in your name.
My god brighten your path
please respond quickly.
Dr Nikodo Umbunga
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Seriously, 5k on deposit for 6 months it isn't worth worrying about too much. At 6% after 20% tax, that leaves you with £120 interest; these days you'll be lucky to find much over 3%, which is going to earn you £60...
tinyurl.com/aw3jcw - link to list of best buy accounts - I'd go with the A&L if I were desperate enough to try to earn an extra tenner. It's a lot of hard work opening a new bank account... what with money laundering regulations.
I quite like the Premium Bond idea. But note that bonds don't go into the draw until one full month after purchase.
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Yup - so chuck it in as an extra mortgage payment (if no penalties).
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I have an A&L Pemier 50 account which charges a £10 a month fee but pays 8.5% gross on a £2500 balance. This fine but after 12 months the fee contunues and interest drops to Base Rate minus 1% which is soon going to no interest so I must remember to downgrade the account and stop the fee. There is a similar one year good deal with Abbey but you won't be accepted for it from A&L as they are both part of the Santander Group
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It is a lot of faff to set something up for six months which wont earn decent interest. The more I think about it, the more I fancy the premium bonds.
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Go for High Risk, do some share dealing. I've been playing with £5k since Christmas and, sticking with bank shares (as they are very volatile and can move many percentages in a day) I'd made it up to £6.9 k on 3 buy/sell events. Lost a few bob on Lloyds on Wed (£400) and another £350 on RBS the same day, but made back £250 yesterday, currently showing 27% up. And that's dealing with the share dealing arm of a well known bank - who are reasonably expensive per deal.
Just glad I didn't have any (Lloyds) shares today.
But then - I've had time on my hands - and I've got very lucky - in fact my problem has been that I bail out too soon when the shares are on a roll. Could have made 30% on RBS inside one day recently - I'd bought at a good price but got out when I was 12% up, in just hours. Also would not have lost the £350 if I'd had a bit more bottle. Most deals are only over two days max.
Having said all that, I don't think I'd have the nerve to try to make a living at it, and I can imagine it would take serious time and commitment. I prefer watching greyhounds or horses but have been more successful at this form of gambling...
Edited by smokie on 14/02/2009 at 01:03
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Where can I get *instant* share deals at a high street bank?
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Where can I get *instant* share deals at a high street bank?
There are plenty of online sharedealing services. I use First Direct, £10 per deal.
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You are unlikely nowadays to make good return.
I've just dumped some cash into my mortgage. Now I don't have to pay so much interest.
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