Filled my cash ISA - where to put money next?

[GroundEffect]

Going on from my mortgage thread, I've hit the limit of my ISA for this FY. RBS, my bank, are offering me a quick access savings account at 0.5%AER. That is rubbish.

What are my other options for sticking money in? Can I simply open up a bank account with another bank - one that offers better rates?

I need to be able to access the money in about 6-7 months so it cannot be tied down too tightly. I will be saving around £1300 a month on average (some months a bit more, some a bit less).

[BoRED S2upid]

If you've filled the cash part you still have plenty of room in the stocks and shares bit, some which can be pretty low risk.

[droopsnoot]

Yes, you can open accounts at other banks if you want to chase rates around. S&S ISA would be worth looking into, but I'm not sure it would be suitable if you want the money back in 6-7 months as investments are generally viewed as a longer term (5-10 years or more) thing.

[H22observer]

I withdrew £4000 from my ISA after it dropped from an acceptable 3.1% to a measly 0.25%.

The best isa i could find elsewhere was 1.9%, so i've upgraded to a premium account paying 3% (2.4% net) until i find something better.

[ringram]

S&S with something like a vanguard tracker.

their uk equity income is paying 4.1% divi yield at present..

then SIPP..

[jshell]

Shell share divis are around 5% per annum. Waay better than savings accounts.

[Revisitph]

jshell said:

Shell share divis are around 5% per annum. Waay better than savings accounts.

Which is fair enough. However, over the last 52 weeks Shell B shares (RDSB.LON) have traded between 2092 and 2374 - a variation of between +/- 13.4% and 11.8%, depending on whether you look at the low or high price. In that time they've paid 5-6% dividend, halving the fluctuation so long as you got all the divi. For someone looking at a 5-6 month timeframe, single stocks, even very blue-chip stocks (look at the price of BP in June 2010, Deepwater horizon, or the big domestic energy companies over the last couple of days) look risky. 1. Swings could wipe out your dividends in a day or two, 2. the spread (admittedly low for a big stock like RDSB) and trading costs x2 over a 6/12 period will eat into your investment, 3. you'd be constrained by waiting for the stock to go XD and then the payment date, making your easy access criterion invalid. You could avoid the XD / Divi issue by buying a low cost index fund, but for a 5-6/12 investment, not unless the OP can afford to lose ?30% of their capital.

[-Pete-]

Could someone point me at a thread explaining the differences between funds, OEIC's, ETF's and shares in an S&S ISA? It needs to be an idiots' guide

[mudster]

Could always try some Premium Bonds. No return as such, but the chance to win £1m and you can liquidate at any time.

Wouldn't take money out of a cash ISA (if you're using it as a long term savings account) as you can't put it back in. Long term, interest rates are likely to go up when you'll get some reward.

[-Pete-]

Average return on Premium Bonds for most individuals is very very low. They're a bit of a con, although I do have a few. Think of them as lottery tickets paid for up-front

[ringram]

-Pete- said:

Could someone point me at a thread explaining the differences between funds, OEIC's, ETF's and shares in an S&S ISA? It needs to be an idiots' guide

Try http://monevator.com/category/investing/

Basic summary.. follow the money, you dont want the ones that tax you.

Which pretty much follows in the order you list. Shares themselves are cheapest, but riskiest as you are stock picking.
ETF's can be passive trackers in vangards case at a cost of 0.25%. OEIC's will tear your arm off. AVOID IMO. The chances are that you will lose money with them in comparison to other options.

For fun add Corporate bonds and VCT's to your list.

By all accounts this is would be the best investment you could make for a start http://www.amazon.co.uk/The-Long-Short-Investment-...

Edited by ringram on Thursday 26th September 22:06

[-Pete-]

ringram said:

Useful stuff

Thanks

Edited by -Pete- on Thursday 26th September 23:05