Definitely include the max holding of premium bonds

I think it's about 20 or 25k. I do this because:

it's accessible

the stats on the max holding show an average return of about 5%ish

the returns are tax free

there is always the chance of winning the big one

it's much more fun getting those little brown envelopes and wondering what's inside than it is getting a building society statement

there's no commission

Otherwise, I'd be an interest rate tart and hoick it around the best deposit accounts. A year is very short term for equity investments so unless you know something you could easily lose instead of gain. And if you buy into a unit trust or similar you lose 2% of it straight away and then more in management fees.

If you insist on investing in equities (which would be foolish given your stated objectives) then make sure you check the ratings of the fund and the manager (GIYLF); only invest in a top 5 rated fund; and make sure there's good exposure to India and China.

If you want to punt some of it, buy commodities. I invested in gold and oil in January and it's made a lot. But this is RISKY. Do not punt unless you can handle losing.

Posted By: Old Git on May 13th 2008 at 13:35:45

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