Hi all,
Here is the situation…
I have around $10,000 sitting in various bank accounts as savings which earns me next to nothing. I plan to add around $600-650 per month to it for around the next 12-18 months and dont need to touch any of it until then. (It will go towards my first IP or two)
What would be the best way/place to invest it right now with those parameters in mind?
I thought about putting it into an ING direct savings maximiser acct and then just adding my $650 to it every month. It feels like I should be able to get something better than 5% though because with ING acct you can add/remove funds whenever you like and I dont need to touch any of the money right now?
I’m was thinking fixed term deposits,(but the amount it too low for any substantial increase to the interest rate of 5% for only 12 months). Also, with that I wouldnt be able to add to it…
The share market is a little too risky for me right now too (sorry to mention shares).
Any suggestions would be greatly appreciated, including something as simple as telling me where to look.
Thanks for your help as always [
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Steve.“Knowledge is Power”
sounds like you are on the ball. all yr questions comments, worries etc are completeley valid.
depending whpo you talk to
– property on the way out
– sharemarket volatileetc etc
i think the main thing for you is not to go backwards over the next 12 mos
dont worry too much about interest because with only a small amount amount invested the total interest after tax will be minimal.
an important thing is that wherever you park yr money make sure its liquid enuf to use at short notice incase an opportuniy arises. eg if you keep yr money in some fixed deposit accts and you decide to withdraw b4 maturity you may cop fine etc etc.
i reckon a good savings plan with regular contributions is the wat to go.
you could keep 5 k in say ing and the other 5k
in some kind off balanced fund (bt/colonial etc). atleast in this way you have spread to risk across cash and shares/property etc depending on the fund you choose. funds are good savings plans as you can add to them each month also…cheers
Thanks for your help rogue! [
]Living South East of Melbourne with little option to investigate properties outside the state means I “probably” wont get that rare opportunity for quite a while. I really have a lot more of the market to study before having enough peace of mind to purchase a place this side of 2005 anyways.
I have a relatively low income as im still at uni so interest wont be much of a problem, which is what you said about the small principal amount anyway.
I work at a bank (no, im not a teller [
]) so i get an extra .25% added to any fixed term deposits with them… nothing to write home about over 12-18 months though.What sort of returns have those balanced funds been yielding recently? They do seem like a good idea from the point of view that I can add to them they are diversified.
Steve.
“Knowledge is Power”
Well the choices are either cash (ING) or the market (shares or managed funds).
Additionally an idea is to keep it in a family members offset account BUT be very careful doing this as you will get unstuck if you need to demonstrate 5% genuine savings and it isn’t in your name…..
If you don’t like the volatility of the market or the restrictions of the term deposits then I think ING is as good as anything – I keep my cash in an ING direct account myself.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Why…….don’t u take some holidays, and find an investment property now. You should? be eligible for first home owner’s grant – that’s a $7000 profit straight away. And, if you can still afford to pay off the extra $650per month, as well as the rent on this property……..you’ll be laughing.
Much better than investing and waiting, and you’ll also proffit from any capital gains. You do need to live in the place for a while to qualify for the fhog – check with your state’s legislation to see how long?
[]Hmmmm…. property with only $10k deposit? I don’t think so.
Add to that low rental yield, stamp duty, rates, etc, low income (which greatly limits benefits of neg. gearing) and quite possibly low potential for capital growth…. property at this stage would not be a good idea for 12-18mth.
Go the ING acct. Shop around, most of the big banks rates for term deposits could at best be described as an insult.
As for the 5% rate, it will go up as the RBA raise rates… though not as much or as frequently
Go with Citibank instead of ING. Citibank are no fees. Funds at call, BPAY and internet access.
And they offer 5.25%. They’ve been .25% higher than ING for a while now.
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