Best savings account?

GSXRMovistar · 15 Aug 2023 at 14:08

Scenario, 50k to invest into savings, either a high rate of interest which I guess could make you up to £2k a year, or put it into premium bonds with a chance of a larger, possibly life changing amount? What would the people of OcUK do?

Raymond Lin · 15 Aug 2023 at 14:13

GSXRMovistar said:
Scenario, 50k to invest into savings, either a high rate of interest which I guess could make you up to £2k a year, or put it into premium bonds with a chance of a larger, possibly life changing amount? What would the people of OcUK do?

£10k in savings account earning the max £500 interest a year ( I think you are above the threshold ). Then chuck £20,000 into ISA for this year, and then £20k in Premium Bonds. You will have to skim off the interest monthly and watch it so it doesn't go above £500 annually though.

Or....put the £20k into SIPP or some kind of index fund.

But that's just me.

200sols · 15 Aug 2023 at 14:36

GSXRMovistar said:
Scenario, 50k to invest into savings, either a high rate of interest which I guess could make you up to £2k a year, or put it into premium bonds with a chance of a larger, possibly life changing amount? What would the people of OcUK do?

Depends if you want a guaranteed return or the chance of a big win.

GSXRMovistar · 15 Aug 2023 at 14:43

Raymond Lin said:
£10k in savings account earning the max £500 interest a year ( I think you are above the threshold ). Then chuck £20,000 into ISA for this year, and then £20k in Premium Bonds. You will have to skim off the interest monthly and watch it so it doesn't go above £500 annually though.

Or....put the £20k into SIPP or some kind of index fund.

But that's just me.

I should have probably added a bit more context. In this scenario the other bits (ISA, SIPP, Pensions) are already addressed. This 50k is/was for investment purposes, but stocks/shares have been hit or miss, and property is too much of an overhead. So looking for an investment that won't loose value (other than inflation) but should hopefully work for itself.

ShiWarrior · 15 Aug 2023 at 14:43

Raymond Lin said:
£10k in savings account earning the max £500 interest a year ( I think you are above the threshold ). Then chuck £20,000 into ISA for this year, and then £20k in Premium Bonds. You will have to skim off the interest monthly and watch it so it doesn't go above £500 annually though.

Or....put the £20k into SIPP or some kind of index fund.

But that's just me.

where can you earn £500 with 10K ?

GSXRMovistar · 15 Aug 2023 at 14:43

200sols said:
Depends if you want a guaranteed return or the chance of a big win.

Avoiding anything that can be lost, already used to that!

hurfdurf · 15 Aug 2023 at 14:45

Raymond Lin said:
£10k in savings account earning the max £500 interest a year ( I think you are above the threshold ). Then chuck £20,000 into ISA for this year, and then £20k in Premium Bonds. You will have to skim off the interest monthly and watch it so it doesn't go above £500 annually though.

Or....put the £20k into SIPP or some kind of index fund.

But that's just me.

Are you confident in index funds when some big players and funds are predicting a massive recession and either shorting the market or at least cashing out for the time being?

Disco_P · 15 Aug 2023 at 14:48

ShiWarrior said:
where can you earn £500 with 10K ?

Tandem Bank has a 5% easy access account

BigT · 15 Aug 2023 at 14:50

ShiWarrior said:
where can you earn £500 with 10K ?

Anywhere that pays 5%+ interest. So Tandem for instant access as discussed a little earlier in the thread or some of the 6% one year products on the market.

200sols · 15 Aug 2023 at 14:54

GSXRMovistar said:
Avoiding anything that can be lost, already used to that!

You can get a guaranteed 5% pretty much from gilts, tax free. Tandem etc you will be taxed on the interest, the gilts are equivalent to like 8-9% for higher rate taxpayers. Pretty simple as well.

Eddie99 · 15 Aug 2023 at 15:02

hurfdurf said:
Are you confident in index funds when some big players and funds are predicting a massive recession and either shorting the market or at least cashing out for the time being?

Who is predicting a massive recession? Wouldn't those predictions already be factored in to the current price?

200sols · 15 Aug 2023 at 15:05

hurfdurf said:
Are you confident in index funds when some big players and funds are predicting a massive recession and either shorting the market or at least cashing out for the time being?

Nobody knows. But investing in indexes is for the long term imo. Could easily drop 20% tomorrow.

Raymond Lin · 15 Aug 2023 at 15:05

hurfdurf said:
Are you confident in index funds when some big players and funds are predicting a massive recession and either shorting the market or at least cashing out for the time being?

Is there a right answer for this question that would make you happy? We know that nobody knows what the market will bring, but the idea obviously with any investment into the stock market is for a long term, like 25+ years kind of term....and historical data points to up.

ShiWarrior · 15 Aug 2023 at 15:06

Disco_P said:
Tandem Bank has a 5% easy access account

ive got 15K in a Help to buy ISA earning around £26 a month right now

ive got 5K in Barclays rainy day saver @ 5.12%, earning around £20 a month

ive got 2K in chip @ 4.51% earning £3 or so a month

Ive also have premium bonds

oh wait, you right lol more than i thought ! i was thinking just 1 account i had for a minute :cry:

I'm a numpty

i dont want to go in the higher tax bracket, im on the middle one i think

///EDIT

pretty sure im in the 20% bracket, so i got £1000 a year i can get in interest

Raymond Lin · 15 Aug 2023 at 15:10

GSXRMovistar said:
I should have probably added a bit more context. In this scenario the other bits (ISA, SIPP, Pensions) are already addressed. This 50k is/was for investment purposes, but stocks/shares have been hit or miss, and property is too much of an overhead. So looking for an investment that won't loose value (other than inflation) but should hopefully work for itself.

I mean you could just chuck it into an high interest account and pay the tax above £500....then it 100% won't go down, other than inflation.

hurfdurf · 15 Aug 2023 at 15:13

Raymond Lin said:
Is there a right answer for this question that would make you happy? We know that nobody knows what the market will bring, but the idea obviously with any investment into the stock market is for a long term, like 25+ years kind of term....and historical data points to up.

That answer made sense and therefore made me happy? I’m just asking your opinion, I’m aware you don’t have a crystal ball, don’t worry.

Raymond Lin · 15 Aug 2023 at 15:15

hurfdurf said:
That answer made sense and therefore made me happy? I’m just asking your opinion, I’m aware you don’t have a crystal ball, don’t worry.

But I already stated my opinion in that i would put it into an index fund in the first place? I am confused what you are asking. You are asking if i am confident....well, I am confident enough to say that is what i would do in my first reply.

hurfdurf · 15 Aug 2023 at 15:17

Raymond Lin said:
I already stated my opinionin that i would put it into an index fund in the first place?

Yes and I was probing this logic and asking your thoughts on why you would go that route despite something, and you followed up with more detail and backed your opinion up which was helpful to me. Are you ok?

Raymond Lin · 15 Aug 2023 at 15:19

hurfdurf said:
Yes and I was probing this logic and asking your thoughts on why you would go that route despite something, and you followed up with more detail and backed your opinion up which was helpful to me. Are you ok?

Data?

Look at S&P 500 from 25 years ago...Look at it today.

Done.

Disco_P · 15 Aug 2023 at 16:07

ShiWarrior said:
ive got 15K in a Help to buy ISA earning around £26 a month right now

ive got 5K in Barclays rainy day saver @ 5.12%, earning around £20 a month

ive got 2K in chip @ 4.51% earning £3 or so a month

Ive also have premium bonds

oh wait, you right lol more than i thought ! i was thinking just 1 account i had for a minute I'm a numpty

i dont want to go in the higher tax bracket, im on the middle one i think

///EDIT

pretty sure im in the 20% bracket, so i got £1000 a year i can get in interest

H2B is an ISA so interest from that won't count towards you limit afaik (I'm sure you're aware, but check it against a lifetime isa to ensure you're on the best first time buyer isa, I switched last year)

Summation of your 2 savers is ~£90+£256=£350ish

Worth making sure you're definitely not earning enough for the reduced tax free allowance though you're still under £500pa allowed for 40% payers.