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Short Term Help

Discussion in 'General Investing Discussion' started by green_chairs, 25th Mar, 2010.

  1. green_chairs

    green_chairs New Member

    25th Mar, 2010
    Geelong, VIC
    Hi guys,

    I have $3500 to invest, but only for one year. What do you recommend? Should I put it into shares in one of the big four banks, or diversify a bit more?

  2. Chris C

    Chris C Well-Known Member

    2nd Apr, 2008
    Brisbane, QLD
    I'd say a high interest savings account will be your best bet given the transactional costs of buying and selling shares eating into your returns (it any) that you'd get on the stock market.

    Plus who's to say what that $3500 will be worth in the stock market 12 months from now, and if you really need $3500 in 12 months, then a high interest savings account is probably one of the safer options avaiable for getting all your money back (minus inflation).
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

    9th Jun, 2005
    Sydney, Australia
    I agre with Chris.

    If you might need access to your money within the 12 month period, look at a UBank USaver account ... currently 5.85% interest, which is pretty good (I have 3 of these accounts!)

    If you know you won't need the money for 6 or 12 months, look at a term deposit instead ... means your money will be locked away, but you'll get slightly more interest than an at-call account. UBank has 6 month TDs for 6.11% and 12 month for 6.01% ... although there are other banks offering slightly more - Raboplus is one I think.

    Either way, a 6% "guaranteed" return on your investment over a relatively short period of time like 12 months is better than the risk that you might actually lose money if you invested it in the sharemarket over the same period.