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Saving for a home loan - idle money?

Discussion in 'Money Management' started by Crusher, 19th Dec, 2009.

  1. Crusher

    Crusher Well-Known Member

    Joined:
    11th Jul, 2008
    Posts:
    83
    Location:
    Newcastle, NSW
    I've began saving for my first house, and currently have $2000 or so in an online savings account earning 5%.

    Now that my other debts are out of the way i will be looking at contributing around 1000-1200 per fortnight, so say 2K+ per month.

    i'd like to buy around mid - mid-late 2010, and would like to get some opinions on what to actually do with that money in the meantime.

    Should I, leave it in the bank making maybe $50 interest a month (rough figures) or should i look at opening a MF or something similar and contribute to, throughout the next 6-9 months?

    My CFS Geared Share has made alot of its money back since March, and i know those figures wont continue like that forever.. But, just an idea.

    Any thoughts?
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,623
    Location:
    Sydney, Australia
    The problem with investing your money into a managed fund or other similar investment is that there is no guarantee that you won't lose money on it over the timeframe you are looking to invest.

    If you could be certain of getting a good enough return to justify the risk, then go for it ... but I would suggest that unless you are a professional trader, the risk is not worth it.

    Stick it in a UBank account ... 5.51%pa return practically risk free is pretty hard to beat over a short period if you ask me. If you know you won't need the money for a while - perhaps look at a term deposit, you might be able to get a slightly better rate, but at the risk of not being able to use the money until the end of the term.
     
  3. investor_D

    investor_D Member

    Joined:
    14th Dec, 2009
    Posts:
    8
    Location:
    Brisbane, Queensland
    In light of the crash and burn of the last 12 months, my preference too would be sticking it in a term deposit. I am a property focussed person so can’t offer you advice on margin loans, funds etc.

    This website is a good starting point for comparison on savings accounts and term deposits: Product Snapshots

    I congratulate you on starting the journey!
     
  4. Crusher

    Crusher Well-Known Member

    Joined:
    11th Jul, 2008
    Posts:
    83
    Location:
    Newcastle, NSW
    Thanks for the feedback guys, I think the obvious answer is to stay put.

    I am looking to buy within 6-9 months, so as far as risky decisions go, i think i'll stay clear for now! (having already lost $50k+ in 3 years since i began investing! ha-ha) I think i'll stick with my 5%+ for the timeframe.

    Better to be safe than sorry!

    Thanks.
     
  5. investor_D

    investor_D Member

    Joined:
    14th Dec, 2009
    Posts:
    8
    Location:
    Brisbane, Queensland