Where do you put your medium-term money?
Discussion
I've got various pots of money, but in terms of access they're at different ends of the spectrum
My emergency fund is in an instant access savings account busily being eroded by inflation, but that's the price I pay for knowing it will be there if I need it tomorrow
I have other money in blue chip funds, global trackers etc. but I'm aware my horizon in that should be 5 years plus, and that's the plan - that's for far off costs like school and university fees (eldest is 7), where I can also be strategic about when and how much I draw down
Where's the best place to put money in between? E.g. I'm likely to want to do some house works in 3-4 years, so I want to build up a pot for that - but don't really want it in my savings account doing nothing but being eroded, nor put it into the sort of funds that could easily dip in that time frame, and would mean either putting off the work or crystallising the losses
What would/do you do?
Bonds? Money market funds? Fixed terms savings? Keep it in a global tracker and hope the world doesn't implode?
I've looked at offset mortgages which would seem like the ideal solution, but the rates offered don't make it work for us, as the offset portion would be remain relatively small compared to the loan
FYI I'm not UK based so ISA wrappers and concerns around allowances aren't applicable, but otherwise all/most other products should be available
My emergency fund is in an instant access savings account busily being eroded by inflation, but that's the price I pay for knowing it will be there if I need it tomorrow
I have other money in blue chip funds, global trackers etc. but I'm aware my horizon in that should be 5 years plus, and that's the plan - that's for far off costs like school and university fees (eldest is 7), where I can also be strategic about when and how much I draw down
Where's the best place to put money in between? E.g. I'm likely to want to do some house works in 3-4 years, so I want to build up a pot for that - but don't really want it in my savings account doing nothing but being eroded, nor put it into the sort of funds that could easily dip in that time frame, and would mean either putting off the work or crystallising the losses
What would/do you do?
Bonds? Money market funds? Fixed terms savings? Keep it in a global tracker and hope the world doesn't implode?
I've looked at offset mortgages which would seem like the ideal solution, but the rates offered don't make it work for us, as the offset portion would be remain relatively small compared to the loan
FYI I'm not UK based so ISA wrappers and concerns around allowances aren't applicable, but otherwise all/most other products should be available
I think if you're willing to review your accounts a couple of times a year you can probably get cash to keep up with inflation in this environment?
My emergency fund is earning 4.27% variable with limited access. My savings pot for home improvements, cars etc is earning 3.6% easy access (and I could definitely do better here).
My emergency fund is earning 4.27% variable with limited access. My savings pot for home improvements, cars etc is earning 3.6% easy access (and I could definitely do better here).
trickywoo said:
It s worth considering whether or not you would still spend set aside house renovation money if your other investments had dropped 30%.
Interested to hear where this goes for you? Genuinely......hold only the cash you need for emergencies and put everything else into investments, selling when you need money for e.g. house renovations?
jamgy said:
Yeah my current instant access savings account is only 3.2% so pretty pants
Yes, I think I'd be changing that first of all. More than 4% for instant access is easily achievable at the moment (although I suspect that a lot of variable rates will drop next month if the base rate goes down). If you know that you're going to need cash for renovations in three years, then I'd keep it simple (and risk free) by opting for a three-year fixed rate account. Likewise, there are currently several providers offering > 4% on non-ISA accounts. Cash ISA rates are generally slightly lower, but some are still above 4%.
The yields on Treasury Gilts which mature in roughly three years is around 3.5% - 3.7%. Lower rates on the face of it, but there could be tax advantages if you're already paying tax on savings and your ISA allowance is maxed out.
Cats_pyjamas said:
For me it's premium bonds, mainly due to the tax free 'income' and ability to access quickly. All other savings in equities.
Ours is also mostly PBs. Generally does similar to savings accounts.We have one cash ISA as well (T212), although I don t think the rates are great now.
Some is kept (& moved around) easy access savings elements of Chase or Monzo (whoever offers the highest % at any given time). Monzo best atm.
Also make sure we have regular savers running with main accounts (First Direct, Nationwide). They are more like getting a nice little cash bonus once a year
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