3-4 years best return savings plan?

lovestrat74

I am a bit bamboozled with all the options out there... What would you recommend to achieve the highest return in that relatively short space of time?

Never had one before and do not know much about them but would you recommend a Stocks and Shares ISA or something else? 

RaymondLin

Stocks and Shares are not for short term, it is for 10, 15, 20 years.

For short term, it's high interest or Cash ISA.

lovestrat74

RaymondLin said:

Stocks and Shares are not for short term, it is for 10, 15, 20 years.

For short term, it's high interest or Cash ISA.

Gotcha  

CavemanGrogg

RaymondLin said:

Stocks and Shares are not for short term, it is for 10, 15, 20 years.

For short term, it's high interest or Cash ISA.

Don't be too quick with that answer, traditionally you're correct, however, trading platforms such as FreeTrade* and 212 Trading also pay you interest on any cash balance you have sitting in your account, FreeTrade is not free, I think it's £12 a month - though you can pay this fee yearly and save quite a bit, and they only pay you around but over 5% interest up to a balance of £4k - so anything over the £4k you get no interest on, which works out to be £12.74 per month just to leave £4k sitting untouched in cash in their stocks and shares ISA.  212 Trading are doing the same thing, paying you interest on any cash you have sitting in your account at 5.2%, though on a daily basis, and unlike Freetrade they don't charge you to have an ISA account with them like FrteeTrade does.  And with 212 Trading they give you 5.2% per day and they do not charge you any fees to open a Stocks and Shares ISA, just leaving £1k sitting in your Stocks and Shares ISA doing nothing with 212 Trading earns you £0.15 a day in interest.  So a Stocks and Shares ISA may actually give you a far far better return on any cash savings compared to a traditional cash ISA, fixed term cash ISA, saving accounts and even fixed terms saving accounts - for reference the best interest rate I've been able to find for a fixed term savings account is 4.8%, and for a Cash ISA is 6.50% paid out daily.

So the answer isn't as simple as @RaymondLin gave you, which until recently - before all the interest rate rises and interest that Stocks and Shares ISAs are now paying for cash balances left sitting in your account, would have been 100% correct and the way to go.  Nowadays, you really need to have a look around and spend a bit of time with pen, paper and a calculator or two, and look at more than just what would have normally been the way to go.  And I strongly suggest that you put the time and effort in and do the research, ask yourself questions like ''how fast do I need or want access or the ability to withdraw my savings, do I need to be able to get instant access to my cash, can I give it a week, a month, 3 months and so forth'' .  For reference both FreeTrade and 212 Trading allow instant acces, as in if you want to withdraw cash on Monday, you can withdraw it and it will be in your traditional bank account that same Monday at most a few hours after your initiated the withdraw.

* FreeTrade actually has 3 tiers of membership the completely free tier where you only have access to a tradition trading account and get their lowest interest rate on any cash held in the a count up to a certain amount up to an amount less the £4k, the middle tier where you have access to a Stocks and Shares ISA which is from memory £7.99 a month and again pays you monthly interest on any cash held in your account and again a certain amount which I think may be £4k and at a higher interest rate than their free membership tier, and then they have their top tier membership which includes both a Stocks and Shares ISA as well as a SIPP.

drofluf

CavemanGrogg said:

RaymondLin said:

Stocks and Shares are not for short term, it is for 10, 15, 20 years.

For short term, it's high interest or Cash ISA.

Don't be too quick with that answer, traditionally you're correct, however, trading platforms such as FreeTrade* and 212 Trading also pay you interest on any cash balance you have sitting in your account, FreeTrade is not free, I think it's £12 a month - though you can pay this fee yearly and save quite a bit, and they only pay you around but over 5% interest up to a balance of £4k - so anything over the £4k you get no interest on, which works out to be £12.74 per month just to leave £4k sitting untouched in cash in their stocks and shares ISA.  212 Trading are doing the same thing, paying you interest on any cash you have sitting in your account at 5.2%, though on a daily basis, and unlike Freetrade they don't charge you to have an ISA account with them like FrteeTrade does.  And with 212 Trading they give you 5.2% per day and they do not charge you any fees to open a Stocks and Shares ISA, just leaving £1k sitting in your Stocks and Shares ISA doing nothing with 212 Trading earns you £0.15 a day in interest.  So a Stocks and Shares ISA may actually give you a far far better return on any cash savings compared to a traditional cash ISA, fixed term cash ISA, saving accounts and even fixed terms saving accounts - for reference the best interest rate I've been able to find for a fixed term savings account is 4.8%, and for a Cash ISA is 6.50% paid out daily.

So the answer isn't as simple as @RaymondLin gave you, which until recently - before all the interest rate rises and interest that Stocks and Shares ISAs are now paying for cash balances left sitting in your account, would have been 100% correct and the way to go.  Nowadays, you really need to have a look around and spend a bit of time with pen, paper and a calculator or two, and look at more than just what would have normally been the way to go.  And I strongly suggest that you put the time and effort in and do the research, ask yourself questions like ''how fast do I need or want access or the ability to withdraw my savings, do I need to be able to get instant access to my cash, can I give it a week, a month, 3 months and so forth'' .  For reference both FreeTrade and 212 Trading allow instant acces, as in if you want to withdraw cash on Monday, you can withdraw it and it will be in your traditional bank account that same Monday at most a few hours after your initiated the withdraw.

* FreeTrade actually has 3 tiers of membership the completely free tier where you only have access to a tradition trading account and get their lowest interest rate on any cash held in the a count up to a certain amount up to an amount less the £4k, the middle tier where you have access to a Stocks and Shares ISA which is from memory £7.99 a month and again pays you monthly interest on any cash held in your account and again a certain amount which I think may be £4k and at a higher interest rate than their free membership tier, and then they have their top tier membership which includes both a Stocks and Shares ISA as well as a SIPP.

So if you put £4000 with Freetrade you’d get £208 interest at 5.2% over a year  but would pay £95.88 in fees leaving £112.12. Or an effective incentive rate of 2.8%. 10 seconds research (I looked at MoneySavingExpert) found several ISAs paying more than 4.5%. 

RandallFlagg

You should be able to access a short term money market fund inside a S&S ISA, these will gives you just a slightly less than BOE base rate so paying around 5% or just over until the rates change and are pretty low risk and suitable as a cash alternative for any duration you wish to hold.

CavemanGrogg

drofluf said:

CavemanGrogg said:

RaymondLin said:

Stocks and Shares are not for short term, it is for 10, 15, 20 years.

For short term, it's high interest or Cash ISA.

Don't be too quick with that answer, traditionally you're correct, however, trading platforms such as FreeTrade* and 212 Trading also pay you interest on any cash balance you have sitting in your account, FreeTrade is not free, I think it's £12 a month - though you can pay this fee yearly and save quite a bit, and they only pay you around but over 5% interest up to a balance of £4k - so anything over the £4k you get no interest on, which works out to be £12.74 per month just to leave £4k sitting untouched in cash in their stocks and shares ISA.  212 Trading are doing the same thing, paying you interest on any cash you have sitting in your account at 5.2%, though on a daily basis, and unlike Freetrade they don't charge you to have an ISA account with them like FrteeTrade does.  And with 212 Trading they give you 5.2% per day and they do not charge you any fees to open a Stocks and Shares ISA, just leaving £1k sitting in your Stocks and Shares ISA doing nothing with 212 Trading earns you £0.15 a day in interest.  So a Stocks and Shares ISA may actually give you a far far better return on any cash savings compared to a traditional cash ISA, fixed term cash ISA, saving accounts and even fixed terms saving accounts - for reference the best interest rate I've been able to find for a fixed term savings account is 4.8%, and for a Cash ISA is 6.50% paid out daily.

So the answer isn't as simple as @RaymondLin gave you, which until recently - before all the interest rate rises and interest that Stocks and Shares ISAs are now paying for cash balances left sitting in your account, would have been 100% correct and the way to go.  Nowadays, you really need to have a look around and spend a bit of time with pen, paper and a calculator or two, and look at more than just what would have normally been the way to go.  And I strongly suggest that you put the time and effort in and do the research, ask yourself questions like ''how fast do I need or want access or the ability to withdraw my savings, do I need to be able to get instant access to my cash, can I give it a week, a month, 3 months and so forth'' .  For reference both FreeTrade and 212 Trading allow instant acces, as in if you want to withdraw cash on Monday, you can withdraw it and it will be in your traditional bank account that same Monday at most a few hours after your initiated the withdraw.

* FreeTrade actually has 3 tiers of membership the completely free tier where you only have access to a tradition trading account and get their lowest interest rate on any cash held in the a count up to a certain amount up to an amount less the £4k, the middle tier where you have access to a Stocks and Shares ISA which is from memory £7.99 a month and again pays you monthly interest on any cash held in your account and again a certain amount which I think may be £4k and at a higher interest rate than their free membership tier, and then they have their top tier membership which includes both a Stocks and Shares ISA as well as a SIPP.

So if you put £4000 with Freetrade you’d get £208 interest at 5.2% over a year  but would pay £95.88 in fees leaving £112.12. Or an effective incentive rate of 2.8%. 10 seconds research (I looked at MoneySavingExpert) found several ISAs paying more than 4.5%. 

I don't think that's correct - I have £4k sitting doing nothing in a Freetrade account and I'm getting £12.74 per month in interest for it, you're paying for their ''Plus membership'' - includes a stocks and shares ISA and SIPP, plan yearly though to get it for £95.88, the ''Basic membership'', which is their free one, only pays 1% on up to £1k - does not includes a stocks and shares ISA nor SIPP, and their ''Standard membership'' - which comes with a stocks and shares ISA though no SIPP, which is their middle tier membership pays out 3% on up to a maximum of £2k.  I'm just reading the figures stated in my profiles while trying not to give away the balances or what I have in my trading accounts, savings accounts, cash ISA, and stocks and shares ISA, I'm not capable of doing anything more at the moment as I'm still recovering from last night.  4.5% is not bad, I'm personally getting paid interest daily on my cash ISA at 6.5% per day, sometimes the higher interest rate is not always the best way to go, if I get paid interest daily, I'm making interest on the interest I was paid the day before the very next day, it compounds very fast, if it's paid monthly I have to wait until any interest I've been paid has been sitting in my account for a full calendar month before I will be paid interest on the interest I received the month before, this compounds a lot slower, so you can actually get a better return with an account that pays out a slightly lower interest rate but pays out that interest more often, like daily as opposed to one that has a slightly higher interest rate but pays out interest less often like weekly, monthly - the most common one, or even yearly.

drofluf

Who’s paying you 6.5% a day? Or do you mean 6.5% annually, paid daily?

DiscoStu

Santander's new Edge account comes with a linked easy-access savings account paying 7%, with a limit of £4000.

CavemanGrogg

drofluf said:

Who’s paying you 6.5% a day? Or do you mean 6.5% annually, paid daily?

A cash ISA that has no FSCS protection, and is rated as very high risk - it's a peer to peer lending based cash ISA that specialises in property, not to mention it has a cap, as in a maximum balance you can hold with them, and it is in my opinion very low if you consider that you should ideally be adding to your ISAs for life or until retirement - maximum balance I can have in my cash ISA is only £250K which may sound like a lot but is not really when you consider that most people will be paying into their cash ISA for around 40 years before they start to withdraw any cash.

ICBM

I would donate the money to the Tory party, while also owning a company which can provide government contract work. Note - the company does not have to actually produce anything, just have the theoretical capability to arrange for it to be done.

Although that boat may now have sailed…

CavemanGrogg

DiscoStu said:

Santander's new Edge account comes with a linked easy-access savings account paying 7%, with a limit of £4000.

There's are a hell of a lot of strings and a lot of hoops to jump through to get that 7%  and £175 sign up bonus though, for example:

- £3 monthly fee

- 2 active monthly direct debits

- open account with a minimum of £1.5k

- pay in a least £500 every month

Not to mention that the cash back is capped at a maximum of £10 per month.

LuttiS

DiscoStu said:

Santander's new Edge account comes with a linked easy-access savings account paying 7%, with a limit of £4000.

Santander did a deal last year for a high interest easy access savings account with a pretty high limit, in a few days it will revert to 4.2%, but since i opened it have been getting just inder £100 in interest pm.

Go on money saving expert and compare the high interest savings accounts. It's a low return but pretty safe and limited penalties to access.

paulcaye

I have the trading 212 stock and shares ISA and have used it recently just as a holding account for cash (you don't have to invest in stocks etc)  at 5.2% annually ->  paid delay, which is nice.  You can withdraw anytime (although it can take upto 3 days to transfer, so not exactly fast).

They are also launching a Cash ISA this month also at 5.2% which has FSCS protection. 
 

Barnezy

As others have said Trading 212 in the best option at the moment. 5.2% on cash. If I were you put your savings in now up to £20k. Then work out how much you can add over the next 4 yrs. once you know this, divide the full amount by 48 and set that up as a monthly amount to buy an S&P500 tracker. 

In the long run this will deliver the best returns, you just need to be prepared that the value may be lower when you want to take it out. 

A friend who is a high net worth wealth manager in the city, explained to me that wealthy people put all their money in to these investments, and when they need cash, they simple take out loans against these investments. That way they never need to time the markets and will ensure the best returns.

spark240

Ive just put a few quid in Trading 212 t benefit from their 5.2% interest on cash, depending how much you want to invest, you could put some in cash and and some in S&P 500 fund.

DefaultM

I like the Money Box app.

CavemanGrogg

DefaultM said:

I like the Money Box app.

I'm going to have to look in to that one, I love apps that help me save, one of my favourites believe it or not is the Zopa app, I love their ''smart savings hub'' which is brilliant in my opinion for saving pennies - everyday I transfer the coins like 53p sort of amounts into a savings hub I have with them don't knock it you'd be surprised by how much and how fast you can save money by just emptying your pockets of coins into a coin jar everyday this is just the digital equivalent without having the hassle of carrying kilos of coins down to the bank to convert to notes or deposit into your account £200 in coppers is very heavy and unwieldy, not to mention that I can link almost all my accounts to the app, and in one place I can see all their balances, what is coming out of what account and when, the app is super easy and intuitive to use.  One thing I really don't like about them though is their credit card, but you don't need to get one, and if you do decide to get one, you don't need to use it, but it is a very very bad credit card.

Has anybody here managed to get the 212 Trading credit card yet?  I was sent an email from them to get mine back on the 8th of April, but for some reason whenever I click on the link provided in the email, I get taken straight to my Stocks & Shares ISA, and I can't for the life of me find a option, menu,, or anything really that mentions the credit card while in the app, only on their website and the email that I've received.

Revolutions

My stocks & shares ISA is tracking at about 15% over the last 12 months. During COVID etc I lost money. So 3-4 years is a gamble. As others have said, you’ll get 5%-6% in a standard ISA no problem.

Kittyfrisk

ICBM said:

I would donate the money to the Tory party, while also owning a company which can provide government contract work. Note - the company does not have to actually produce anything, just have the theoretical capability to arrange for it to be done.

Although that boat may now have sailed…

In the case of Chris Grayling's Brexit ferry's, no sailing took place & still cost between £33 & £50 million...

notanon

Not sure what became of this government trying to gouge ppl even further:

Fractional shares and ISAs – HMRC are probably wrong - https://taxpolicy.org.uk/2023/10/12/fraction/