Best interest rate, UK?

Question

Where in UK can I get the best interest rate (not isa please). I want to invest £100,000 for one year. Also do I go for bonds or savings account - not sure of the difference... Thanks for your help

thanks for the tip on blue chip shares. How and where do you buy them?

Answer 1

Martyn Lewis's site is another good place to see a broad range of investments - see link below

Or money supermarket, as was already said.

You have three basic options:

Interest-bearing account: very safe - you are guaranteed to get your initial investment back, plus a little interest - but the best returns.

Bonds - return is based on one (or, in the case of a fund, several) companies paying back a loan. Slightly better return, but you have two risks: (1) the company goes bust (probably very unlikely), or (2) interest rates go up. The reason that bond prices fall when interest rates go up is that they have a fixed interest rate on them, so when other interest rates are higher, they become less attractive.

Shares - you buy a slice of one or (especially with a fund) a number of companies. These give the highest return, but are also the riskiest, because share prices in a given company can go up or down very quickly and by large amounts.

Within shares you can again opt for more risk (eg small companies, or companies in a developing region such as China or India) and should get more return - but have more chance of losing a lot.

If you want to invest in shares or bonds and are inexperienced, I would definitely recommend that you buy into one or more funds, where your investments are pooled with those of many other people and managed by a professional. You lose a little return, but avoid a lot of hassle.

NB don't buy funds direct as they will charge you an initial fee of around 5%. buy instead through a "share supermarket" or online broker and reduce this to more like 1%. I use Hargreaves Lansdown and find them good, but others may be as good or better - choose one you feel comfortable with.

If I were investing that - and this isn't advice for you, it's based on my preferences and guesses about the future - I'd split it up and invest:
£40,000 in a high-interest savings account
£40,000 in a blue-chip fund (one specialising in large UK companies)
£20,000 in an emerging markets fund in China, India or Latin America.

That way I'd get a reasonable return - and a chance that my "wild card" fund will, say, go up by 50% (as some of mine have over the past year or so) - while keeping most of my investment relatively safe.

Answer 2

I would be tempted to buy some blue chip shares. I did and currently up 33% this year. Good luck

Answer 3

Go to your nearest branch of the Bradley and Bingley Building Society and ask to see an independant financial advisor. They are an independent bank and the advisor is obliged by law to give you the best advice. They do not sell their own products they only sell other companies products. I do not work for them or anyone connected with them.

Answer 4

www.moneysupermarket.com will give you all the answers you need.