Money advice please!

Macca · 20 Dec 2007 at 17:12

Well i have about £5,000 sitting in a bank account right now which can be used for whatever i want. I'm looking for the best way to make interest on this money, but to still have the option to use this money during the year and possibly take a large amount from it in easter. I'm going travelling next year so just looking to maximise my budget with this cash, while i have the rest to pay off flights/equipment etc.

I have no clue what to do with it if i'm honest and it feels a waste just keeping it in the bank earning 0 interest from it.

So opinions please

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knip · 20 Dec 2007 at 17:13

Give it to me, I can spend it in no time, and you will be left with a lovely warm feeling that you made someone else happy!

Macca · 20 Dec 2007 at 17:17

I know that the oh so lovely warming feeling would be great but i think my trip round the world would be so much better

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Bes · 20 Dec 2007 at 18:40

www.moneysavingexpert.com

ISA for as much as possible and high interest account for the remainder usually works best.

GarethDW · 20 Dec 2007 at 18:44

A traditional ISA won't be great though, if you're planning on withdrawing the cash at Easter, as you'll lose the high interest part of it... plus the individual limit is £3K iirc (I let the missus sort out our savings... I just pay the bills). You can get Instant Access ISAs whereby you can get the money out quickly, but the rate of return is lower than a traditional ISA.

edit: think I'm getting my ISAs confused with the old TESSAs, where you could only withdraw the interest... but there's something about cashing in an ISA which means it's not a good choice if you're not keeping the cash in it for the long term. Can't remember what it is though.

Glaucus · 20 Dec 2007 at 18:54

GarethDW said:
edit: think I'm getting my ISAs confused with the old TESSAs, where you could only withdraw the interest... but there's something about cashing in an ISA which means it's not a good choice if you're not keeping the cash in it for the long term. Can't remember what it is though.

You can only invest your 3000 tax free isa once. SO if you put in 300. Then withdrawal it. Then put 3000 back in. It won't be tax free and as such a high interest savings account will earn you more.

eXor · 20 Dec 2007 at 19:06