Savings

[Lannister902]

I have around 18k in savings that I may put towards paying off my mortgage in 3 years time, in the meantime I have it sitting in a normal savings account.

Stupidly I've never really given it much thought, thinking all banks offer stupidly low interest rates with every account, that it's pointless even thinking about it. The subject came up with a colleague, and he told me I was crazy, and there's plenty that can be done with that in the bank.

Any suggestions?

[GT03ROB]

What suggestions did he give you as there is plenty you can do with it according to him!

[anonymous-user]

Why are you borrowing money that you’ve already got?

If you have an answer to the question above you’ll probably be well on the way to knowing what to do with it.

[funinhounslow]

£18k that you need for a specific purpose in three years?

In all seriousness premium bonds might be your best bet. Forgo the pitiful interest rates on savings accounts and no risk to your capital

Plus it’s quite exciting checking the results every month...

[bitchstewie]

Risk/reward.

If you want to find a minimum of £18K in there in three years time sadly you're not going to make much (hardly anything) from it.

Premium Bonds are probably the best 100% safe idea I can think of.

[steveo3002]

premium bond or about 0.4% on savings is about as good as it gets

Edited by steveo3002 on Saturday 27th March 11:32

[williaa68]

Can you pay the mortgage, or part of the mortgage, off early? Whatever you are paying on the mortgage is the net hurdle rate for any investment. If you are paying 2.5% on your mortgage the if you are a basic rate tax payer you need to earn 3% to make more than you are paying. More if you are a higher rate tax payer, maybe the same if it is a capital gain and you haven’t used your allowance.

Risk free rates (eg less than 85k in a Uk bank) at the moment are <0.5%. Anything you invest in that pays you more, or has the potential for a capital gain means more risk. Broadly speaking the higher the potential reward the greater the risk. Only you can determine your risk appetite....

[Somebody]

Does your mortgage provider allow you to make over-payments in a given year? Make payments now rather than in 3 year's time to save on the mortgage interest.

[Glosphil]

I have monthly savings instant access account that pays 1.3% & an ISA that pays 0.75%. Even better interest rates are available if money committed for 2 or 3 years.
I agree that paying a chunk off mortgage is worthwhile.