I have a small amount of money to invest; where do I start?

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Bedaquiline
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See thread title. I have about £300-£500 I can spare for a while, and want it to start earning interest for me instead of just sitting in my bank account, but don't want to expose myself to too much risk. I'm 21, currently studying a master's, interested in FIRE (mostly the financial independence and paying off the mortgage bit, as I don't actually ever want to retire!) and work part-time as an online tutor which is how I earned the money. I want to work in the public sector so I don't expect to be earning vast amounts. Any tips?

I'm not doing crypto or playing the stock market myself - too risky. I'd just like some basic tips on ISAs vs savings accounts vs bonds etc, as I'm not sure where to start with the financial planning.
Last edited by Bedaquiline; 8 months ago
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0le
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Moneysavingexpert has extensive guides on this matter.
https://www.moneysavingexpert.com/sa...best-interest/

Interest rates have been very low for several years and are particularly low right now due to the pandemic. You won't get much for £500 I'm afraid.
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Zarek
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Regular saving, each month what you can afford, in to a shares ISA (or if you get the option a company share scheme) is a good bet. You could save in to the Lifetime ISA and get a government bonus, designed to help with house buying. Unless you need the £500 I would put it in to a shares ISA. You might be able to get some free recommendations on ISAs from your bank or somewhere like Virgin Money. Savings account and cash ISA interest rates are woefully low, you have to research the best you can find, mostly accounts can be opened easily and transferred on line. I am currently with Coventry Building Society, the low interest rate still means any savings there are slowly being eroded by inflation. Anyway my key advice is save every month both in to a pension when you start work and also as much as you can share in to something else that can be expected to generate a reasonable rate of return.
Last edited by Zarek; 8 months ago
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Bedaquiline
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Thanks all for your replies. For now, I'm mostly giving up on accumulating decent interest. I guess I'll just keep the money for my emergency fund.

I checked moneysavingexpert and my current idea is to open a Virgin Money current acount and plonk the maximum £1000 in there (the figure of £500 was based on if I can't access the money; if I can withdraw whenever I want, I can spare more); accumulate the 2% interest i.e. £20, and leave as soon as the deal is over.

You also get 15 bottles of wine, and I'm very fond of wine; I typically drink £5 wine from lidl (don't mock me, lidl has some decent stuff for that price!) so 15x5 = £75 to me. My parents have used Virgin Wines and they paid £7.50 per bottle, but they already think that's a bargain as the wine is apparently higher quality/worth more than most £7.50 wine. What I'm saying is, the wine is the real incentive for me as it's worth minimum £75 (if I just replace my lidl wines with these wines) and more likely £112.50+.

Is this a sensible idea? I know that if I'm referred to TSB and open an account with them, me and a friend get £100 each. But I don't have any friends with TSB so I'd be using an internet stranger's referral, at which point the Virgin Money deal looks better, but I'm not sure if I'm overvaluing the wine. Money is, of course, much more flexible than wine in terms of what I do with it... but my wine expenses are significant :lol:
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Zarek
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(Original post by Bedaquiline)
Thanks all for your replies. For now, I'm mostly giving up on accumulating decent interest. I guess I'll just keep the money for my emergency fund.

I checked moneysavingexpert and my current idea is to open a Virgin Money current acount and plonk the maximum £1000 in there (the figure of £500 was based on if I can't access the money; if I can withdraw whenever I want, I can spare more); accumulate the 2% interest i.e. £20, and leave as soon as the deal is over.

You also get 15 bottles of wine, and I'm very fond of wine; I typically drink £5 wine from lidl (don't mock me, lidl has some decent stuff for that price!) so 15x5 = £75 to me. My parents have used Virgin Wines and they paid £7.50 per bottle, but they already think that's a bargain as the wine is apparently higher quality/worth more than most £7.50 wine. What I'm saying is, the wine is the real incentive for me as it's worth minimum £75 (if I just replace my lidl wines with these wines) and more likely £112.50+.

Is this a sensible idea? I know that if I'm referred to TSB and open an account with them, me and a friend get £100 each. But I don't have any friends with TSB so I'd be using an internet stranger's referral, at which point the Virgin Money deal looks better, but I'm not sure if I'm overvaluing the wine. Money is, of course, much more flexible than wine in terms of what I do with it... but my wine expenses are significant :lol:
Looks like quite an interesting account. You need to understand the terms fully, it suggests you also have to put £1000 in the savings account at 0.5% and to transfer another current account with at least two direct debits. If the wine appeals, why not, you can’t really go wrong with this scale of investment. Perhaps you can invest in fine wines in the future. Don’t do any dodgy dealing with TSB account, this is sure to backfire
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StriderHort
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Personally for that amount I'd go ISA, as has been noted, interest rates across the boards suck and aren't likely to get any better.

You aren't willing to risk stocks. crypto ect, and tbh for £500 the fees would likely cripple you.

Tying up the money for 3-5 years in bonds wouldn't appeal for the likely rap return they also give. I'd personally be more likely to keep the money handy for any good deals or opportunities, eg if you'd been able to snap up a PS5, stick on £50 and sell it on. People would bite your hand off for it and you'd have made the same 10% odd in a day that you'd struggle to get from a 5 year bond.

I'd be leery of any financial provider that paid me in booze tbh, but if you're confident you'd get value out of that then that could work well for you in the short term. Again you're getting 6-10% return almost immediately.... assuming there's no horrible small print...
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Bed boy
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(Original post by Bedaquiline)
See thread title. I have about £300-£500 I can spare for a while, and want it to start earning interest for me instead of just sitting in my bank account, but don't want to expose myself to too much risk. I'm 21, currently studying a master's, interested in FIRE (mostly the financial independence and paying off the mortgage bit, as I don't actually ever want to retire!) and work part-time as an online tutor which is how I earned the money. I want to work in the public sector so I don't expect to be earning vast amounts. Any tips?

I'm not doing crypto or playing the stock market myself - too risky. I'd just like some basic tips on ISAs vs savings accounts vs bonds etc, as I'm not sure where to start with the financial planning.
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