Putting Money Away For A Year

[islasmum]

If I had a £1000 to put away for one year, what would give me most return on it?

[Zacs-Master]

The favourite in the 2:30 at Kempton. :-)
Britannia BS 2.03%

[Sqad]

ZM.....LOL

I agree with Zac.......

[Psybbo]

Not on the ones I backed today

[hc4361]

If you pay tax, the interest on £1000 at 2.03% is £23.

If you aren't desperate for £23 you might as well try your luck on the premium bonds. The worst that can happen is you win nothing and get back your £1000.
You may be a big winner.

[islasmum]

OK, so if I rule out betting and gambling........?

[Sqad]

Maximum return of about £20 and that would have to be taxed.
Not worth it....spend it.

[Jennykenny]

Buy Premium Bonds. You have a chance of winning £25.00 to £1,000,000 every month. They are totally protected, you can get them back in about a week if you need the money in an emergency.

[Zacs-Master]

I did give a sensible answer which I found on Money Saving Expert website.

[factor-fiction]

I'm not sure where the figures are from HC- isn't it £20.30 before tax so can't be £23 after tax. The tax can be 20% if you are a taxpayer. There may be a 10p band too for savings. Or no tax if you declare you are a non tax payer or find an ISA at this rate

[hc4361]

You're right, factor. Not worth putting in to a savings account at the current rates.

If you open a Nationwide Flex account you will get 5% interest for one year - a much better return.

http://www.nationwide.co.uk/current_account/flexdirect/default.htm?intcmp=Intcmp_1949

[Khandro]

If the government backed premium bonds can give out large prizes, from where do they get the prize-money; with interest rates virtually non-existent, is it run at a loss, or is it a sort of Ponzi scheme?

[islasmum]

Sorry Zac, I did read your answer - I was browsing yesterday and I found that building societies and banks seemed to be offering around 2.03%, which doesn't seem quite what I was looking for - Premium Bonds are a good idea, I think that I may actually have a Premium Bond somewhere, but absolutely clueless to where it may be now! What about gold?

[factor-fiction]

I think the prizes are only around 1-2% of the fund so it doesn't cost the government much -it's cheaper than borrowing in other ways.

[hc4361]

The large prizes are only a per centage of the savings. Base rate in the UK may be 0.5% but there are still big earnings to be made with investments, especially if you have a lot of money to invest.

The prize fund has recently been cut because of the poor interest rates

[sandyRoe]

Gold may have reached its price peak and there's also the buyers premium to consider. I don't think it's a good investment now.

[hc4361]

Gold prices are at an all time high so it is a very poor investment.
You are supposed to buy when the price is low and sell when it's high.

[islasmum]

Must learn to type faster! Thanks ff, hc and Kandro - what is a Ponzi system?

[Khandro]

f.f.; If everyone cashed in their bonds could they be re-paid without a bail-out?

[sandyRoe]

It's a confidence trick operated by crooks. They offer fantastic returns on your investment and use other investors money to pay the earlier investors. By its nature it's bound to collapse leaving a lot of people out of pocket.

[factor-fiction]

It would be a problem for the government I think. But if a bailout was needed who would pay it!