What do wise Monzo users do for short term investments? I have £10000 that i don’t need for 6 months, but i don’t want to risk it in my shaky freetrade ISA. (i haven’t openned anything this tax year.)
If you want no risk put it in the following.
1.5% instant access at Marcus
1.57% 6 month at oak north
1.6% 6 month with Hargreaves Lansdown active savings
There isn’t much of anything else that will get you a better return with no risk. Unless you have stacks of cash earning interest outside and ISA you won’t need an isa as you won’t make enough interest.
oaknorth seems to be only 1.36 for 6 months through the monzo app
This one direct is what Eden is referring to:
@Eden has definitely given you the best answer. Which would be to just stick it in a savings account.
I certainly wouldn’t go buying stocks and shares or ETFs etc over such a short period.
No risk = below inflation return, whichever way you look at it
Personally I’d stick with freetrade but instead of a “shaky ISA” (where I’d be worried about messing up my tax allowances by moving 10k around), I’d put it in their general account and put the money into a few low cost funds like the Dividend one, S&P500 and maybe some precious metals.
You can expect around 3-4% return on average over 6 months, although this is the average of many peaks and troughs. If the 1929 crash happened again in the next 6 months I think you’d lose about 8k of your money. If that’s a risk you can’t take then stick it in oak north and see the value fall by 8k over a much longer period
Not over 6 months. Too volatile for that. Too risky. Too many ups and downs.
If the OP doesn’t need the money for 15 years, yeah follow this advice.
6 months. Nah, savings account all day.
Seconding a fixed term savings account with decent interest. The ones @Eden suggested are all ideal.
I listed the direct one as mentioned, I didn’t have the Monzo one at hand. Theres a 0.21% difference between them, which you might want to consider. It does depend on when you need access to the money, or if you want to maximise as much of the interest as you can for the short period you have. In which case you might want to look at HL, or look at other providers.
If you really don’t mind the risk of losing money in the 6 month period then you could, but keep in mind, even lower risk options like gilts, bonds, etc. can go down as well as up and 6 months is a very short period of time.
Remember that they only want it in there for 6 months. A interest paying account might be the best option, unless you really don’t mind the risk.
I never bothered mentioning this one as its just too small an interest rate for the amount of money. 0.38% difference between the best instant access account, and 0.48% against a 6 month savings account.
So the convenience of keeping it all in the Monzo ecosystem costs about £10.50 over six months. Only the OP can decide whether that’s worth it.
This is true, but at 1.36% you’d be better off going with a Marcus account at 1.5% which has the added benefit of instant access. The convenience factor unfortunately for Monzo kind of goes away with Marcus, its just ridiculously easy to set up and use.
Some options to consider at least.
Only ‘kind of goes away’, as it is still a second thing to log in to, and nothing can change that.
To be honest I think this might be a little nitpicking. It’s the same number of actions, it’s really not costing any more time. When I say ridiculously easy I’m not joking. The Marcus website acts like a phone app, you just add it to your home screen, login is simple, setup takes less than 10 minutes, and you have an account with more interest and instant access compared to the monzo oaknorth 6 month access account.
With fixed period accounts it honestly doesn’t matter where it is, you cant access the money anyway, it just sits there.
@monzojack 6 months is not a long time. Like others have said, for this short time period its best to put the money in a no risk savings account than invest it. You can achieve slightly better savings account rates than have already been mentioned in this thread by going for a notice account. The best notice accounts pay around 1.8% AER compared to around 1.6% for the best 6 month accounts and 1.5% for the best easy access accounts. Here are the current best notice accounts that also pay interest monthly instead of annually:
If you are prepared to open more than one bank account you could also consider opening a Nationwide FlexDirect account to earn 5% AER on part of the £10k, providing you can meet the account requirements.
You do however mention investing, which implies you want to take on some risk. I definitely would advise against stocks & shares which are too volatile. But if you really do want to take on risk you might want to consider peer-to-peer lending, which is less volatile than the stock market but still comes with risk that you may not get all your money back. The reward is a higher rate than you can achieve with bank accounts. Peer-to-peer lenders that provide easy access to your money under normal market conditions offer target (non-guaranteed) rates of 3 to 7%. If you want some recommendations in this area, let me know.
Good options on the notice accounts These might prove better if you don’t need your money in exactly 6 months but know with some advance when you need to take it out.
My only concern with this might be getting your money out, granted im not well read up on it, but my understanding is if your money is in a loan and you want it back the loan needs to be sold to another lender, which may not sell right away? But higher risk higher potential reward.
as it is still a second thing to log in to, and nothing can change that.
I have a Marcus account, so I know how easy it is to set up. I still find it easier and less mental load to just have things directly accessible within Monzo, and wouldn’t object to the £10 loss per 6 months quoted in this thread in this instance for the convience.
It’s a lot of money for that reason, but each to their own, lots of people do that.
Just to say, if you’re referring to my post, it was £10.50 over six months, not £10.50 per month for six months