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Best way to invest/save grandfathers savings? Watch

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    My grandfather moved into a bungalow after selling his house. My parents and other immediate family manage his savings from selling his house, which are currently in savings accounts and making ridiculously little interest. My parents started looking into premium bonds, however we know very little about it, and whether it's worth putting money there rather than in a normal savings account.

    The only stipulation is that the money must be secure, we can't afford to lose it in risky investments (but would also like to know if there's something better we could be doing with it).

    Is there anything he could be doing with his money to get more interest?


    EDIT: Realised I forgot to put how much we're trying to invest. I think we're looking at something around £10,000 to try something new with although it's potentially more or slightly less as he has a lot more in the savings accounts.
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    Any investments with any chance of a decent return will be risky, you dont get something for nothing do you?
    You could try putting it into precious metals, shares, stocks, bonds, ISAs. To be honest you can invest in anything you like hell you could buy futures on the weather in santa monica if you like
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    Well for starters it should be in an ISA not a savings account. I believe you have just missed by a whisker the end of the previous ISA year which you should be kicking yourself for... What is the total amount you have available and do you live comfortably enough that you can lock it away and forget about it? That will dictate what sort of things you should invest it in.

    It's certainly a mad world where a lottery like premium bonds gives a better expected return than a savings account. However, according to Martin Lewis, that is indeed the case, most of the time.
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    (Original post by scrotgrot)
    Well for starters it should be in an ISA not a savings account. I believe you have just missed by a whisker the end of the previous ISA year which you should be kicking yourself for... What is the total amount you have available and do you live comfortably enough that you can lock it away and forget about it? That will dictate what sort of things you should invest it in.

    It's certainly a mad world where a lottery like premium bonds gives a better expected return than a savings account. However, according to Martin Lewis, that is indeed the case, most of the time.
    I'm not sure if it's ISAs or a savings account, either way we took out the best interest rates we could and he stands to make about £30 per year or some equally ridiculous figure

    I would say locking it all away for a long time is probably not the best idea, we aren't a particularly wealthy family and don't hold much in savings other than what we have from the house sale. It's going to be important to us to have quite a bit of it in accessible savings accounts since a few grandchildren are going to university soon, my uncle needs some to buy a house etc.

    My mum was talking about putting £10,000 into premium bonds so I'm assuming there is £10,000 we can afford to try and make some money with.
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    (Original post by cl_steele)
    Any investments with any chance of a decent return will be risky, you dont get something for nothing do you?
    You could try putting it into precious metals, shares, stocks, bonds, ISAs. To be honest you can invest in anything you like hell you could buy futures on the weather in santa monica if you like
    Very true. As a weather fanatic i'd see a potential opportunity in the US Gulf which has not been hit by a major hurricane since 2005 (Issaq, Irene and Sandy were all relatively weak as hurricanes go) so perhaps shorting insurers down there or investing in an industry which gains from these events because they are overdue a big hit.

    What a world we live in.
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    Best way to keep it safe and earn a 'fair' amount of interest is to stick it into an ISA because they're tax free, so you don't pay any tax on the interest earned.

    If you can't open an ISA account by the new financial year (midnight tonight - 6th April) then your mum and dad can just open two separate ISA's in their own names and split it £5k each. This is because there is a limit of depositing a total of £5,340 in cash into any ISA for the year.

    (Original post by Money Saving Expert)
    The Top New Easy-access ISA's
    Our top-pick easy-access Isa is Santander's Flexible Isa (issue 3), which pays 3.3%, although some existing customers get 3.5%. It tracks base rate for a year so if the rate rises so too will the return on your savings.

    Barclays's 3.25% Golden Isa is the next best base rate-tracking product. However, the AA's Isa pays a higher 3.35% but it doesn't guarantee to track base rate.

    The current top easy-access Isa that allows transfers from old Isas is Halifax's Isa Direct Reward which pays 3%, or 3.2% to some existing customers. It does not guarantee to track base rate (see the Top ISA Transfers guide).
    (Original post by Money Saving Expert)
    The Top New Fixed ISAs
    If you're prepared to lock your cash away for a set time you get a guaranteed rate with a fixed Isa.

    Be warned that you face heavy withdrawal penalties for taking the money early. And while the initial rates are often higher than easy access deals you will not benefit if base rate rises.

    The current top two-year fixed cash Isa is from Santander at 3.7%, with a minimum deposit of £500. For five years, the top option is Birmingham Midshires at 5%, again with a minimum deposit of £500.
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    (Original post by Charlotte49)
    I'm not sure if it's ISAs or a savings account, either way we took out the best interest rates we could and he stands to make about £30 per year or some equally ridiculous figure

    I would say locking it all away for a long time is probably not the best idea, we aren't a particularly wealthy family and don't hold much in savings other than what we have from the house sale. It's going to be important to us to have quite a bit of it in accessible savings accounts since a few grandchildren are going to university soon, my uncle needs some to buy a house etc.

    My mum was talking about putting £10,000 into premium bonds so I'm assuming there is £10,000 we can afford to try and make some money with.
    Yes but I think adults are a bit set in their ways. At that "interest" rate (looks like something like 0.003%!) it will certainly be in a savings account, and not a particularly good one at that. You can only put £5640 of it in an ISA because that's how much you can put in per tax year (the new year maaaybe having just passed? I'm not sure).

    The best ISA's at the moment pay 2.5% plus one-year bonuses of about 0.5%, which just about matches inflation. You can transfer after a year in order to get a new bonus with someone new.

    They can be as accessible as savings accounts, though you will not get as high an interest rate. My ISA has a sixty-day notice period and gives me 3.1%.

    Look on the Moneysavingexpert web site to see what is currently the best ISA provider.

    Do not allow your parents to rubbish your suggestions because you're a kid (as mine have before). They are often set in their ways and remember a time when a savings account actually paid interest.
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    (Original post by scrotgrot)
    Yes but I think adults are a bit set in their ways. At that "interest" rate (looks like something like 0.003%!) it will certainly be in a savings account, and not a particularly good one at that. You can only put £5640 of it in an ISA because that's how much you can put in per tax year (the new year having just passed).

    The best ISA's at the moment pay 2.5% plus one-year bonuses of about 0.5%, which just about matches inflation. You can transfer after a year in order to get a new bonus with someone new.

    They can be as accessible as savings accounts, though you will not get as high an interest rate. My ISA has a sixty-day notice period and gives me 3.1%.

    Look on the Moneysavingexpert web site to see what is currently the best ISA provider.

    Do not allow your parents to rubbish your suggestions because you're a kid (as mine have before). They are often set in their ways and remember a time when a savings account actually paid interest.

    Thanks so much for the help. That definitely seems like a much better option. When I heard how much interest they were getting it just seemed ridiculous to me, though I know next to nothing about finance.


    Will +rep you all for your great help when I get some more rep points to give
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    (Original post by Charlotte49)
    Thanks so much for the help. That definitely seems like a much better option. When I heard how much interest they were getting it just seemed ridiculous to me, though I know next to nothing about finance.


    Will +rep you all for your great help when I get some more rep points to give
    No problem - oh, and don't let them be loyal to their current banks either. The best ISAs are from obscure, often regional building societies. The corporates betrayed us long ago, so no loyalty should be given to them. Just make sure your ISA is backed by the FSA which insures you against loss of savings up to £85,000 in each institution you bank with. (99% of them are part of this scheme.)
 
 
 
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