Short term low risk
Discussion
Having sold some land recently we'd planned use the money to move house, however it looks like I'm going to be working away most of the year so might need to put house moving plans on hold for 6 months to a year.
Currently have money sat in a couple of banks earning 1% interest, which isn't ideal but I'd originally thought it would only be for a couple of months. I'm reluctant to put it in to a fixed rate bond as we'll probably be in a position to move in under a year, but I don't really want to take much/any risk on it. What are my options?
Currently have money sat in a couple of banks earning 1% interest, which isn't ideal but I'd originally thought it would only be for a couple of months. I'm reluctant to put it in to a fixed rate bond as we'll probably be in a position to move in under a year, but I don't really want to take much/any risk on it. What are my options?
RizzoTheRat said:
Having sold some land recently we'd planned use the money to move house, however it looks like I'm going to be working away most of the year so might need to put house moving plans on hold for 6 months to a year.
Currently have money sat in a couple of banks earning 1% interest, which isn't ideal but I'd originally thought it would only be for a couple of months. I'm reluctant to put it in to a fixed rate bond as we'll probably be in a position to move in under a year, but I don't really want to take much/any risk on it. What are my options?
Savings account is your only sensible option, if you don't want to risk the capital.Currently have money sat in a couple of banks earning 1% interest, which isn't ideal but I'd originally thought it would only be for a couple of months. I'm reluctant to put it in to a fixed rate bond as we'll probably be in a position to move in under a year, but I don't really want to take much/any risk on it. What are my options?
How about Zopa Access? A bit more risk than a savings account, but still fairly safe.
https://www.zopa.com/lending
https://www.zopa.com/lending
Mortgage interest rate isn't that dissimilar to what I'm getting from the bank on savings at the moment, so if I can get a slightly better return on the savings it's not really worth paying off the mortgage as I'd want to re-borrow that money at a slightly higher rate (plan would be borrow a bit more than current mortgage as well as use the savings when moving).
I did wonder about these microloan organisations, but presumably you really need to leave your money in there for a while and it'll take a while to get it back out?
Premium bonds might be a sensible idea, average return is apparently 1.25% though which isn't a lot
I did wonder about these microloan organisations, but presumably you really need to leave your money in there for a while and it'll take a while to get it back out?
Premium bonds might be a sensible idea, average return is apparently 1.25% though which isn't a lot
Edited by RizzoTheRat on Wednesday 22 February 10:49
I've only been using Zopa for a year and not needed to take anything out yet - getting your money out of the Access product is meant to be quite simple though, you sell the loans onto someone else (the platform does it all for you). I don't think I'd put loads in there though as there's no FSCS deposit protection, but I've got a decent return on my savings so I'm happy so far.
I recently sold my zopa loans, around £7k split between the classic and access. It took around 3-4 days to fully sell for both types. Afaik the difference is the 1% fee you pay for the classic sale, not the speed of access.
It doesn't happen in a lump sum though, I got a few £k per day. Most of my loans were fairly old up at 4-7% so would've been easily transferred to new lenders, I think this affects the time it takes to get your money out.
It doesn't happen in a lump sum though, I got a few £k per day. Most of my loans were fairly old up at 4-7% so would've been easily transferred to new lenders, I think this affects the time it takes to get your money out.
RizzoTheRat said:
Mortgage interest rate isn't that dissimilar to what I'm getting from the bank on savings at the moment, so if I can get a slightly better return on the savings it's not really worth paying off the mortgage as I'd want to re-borrow that money at a slightly higher rate (plan would be borrow a bit more than current mortgage as well as use the savings when moving).
I did wonder about these microloan organisations, but presumably you really need to leave your money in there for a while and it'll take a while to get it back out?
Premium bonds might be a sensible idea, average return is apparently 1.25% though which isn't a lot
Are you sure about the rates of mortgage versus savings? The former rate is paid from your net income while the latter is quoted gross of tax.I did wonder about these microloan organisations, but presumably you really need to leave your money in there for a while and it'll take a while to get it back out?
Premium bonds might be a sensible idea, average return is apparently 1.25% though which isn't a lot
Edited by RizzoTheRat on Wednesday 22 February 10:49
As has been said there is no FSCS safety net with these micro loans. I'm not sure I'd be risking my house deposit in something that could lose the lot for the sake of what a couple of grand at most given the timescale?
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