Lets say I have personal savings of £20,000 in cash.

How could I possibly get the most out of these savings without just letting it sit there idle? What are the options out there to make the most out of this money? i.e. investment, ISA accounts etc...

I know this may be a bit vague but I'd like to hear what options people have invested in.


My main goal is to ideally increase my income. I don't have to worry about downpayments or anything like that for now, I just want to put the money to use by investing rather than it just sitting there overtime. In terms of time, I don't really have a goal in mind but I'd like to start generating profits from investment and then see where that takes me.


  • 2
    Do you have any goals for this money? Like you plan to use it in x number of years for a home downpayment? Or do you just intend on having this provide income? When does the income need to start?
    – Pete B.
    Commented May 18, 2018 at 13:52
  • @PeteB. Good point, I've edited the post. Commented May 18, 2018 at 13:55
  • 1
    do you have a mortgage or any debts? Commented May 18, 2018 at 14:11
  • You have to determine how much risk you are willing to take on. That will direct you towards income, growth, or a combination of both. Commented May 18, 2018 at 14:20
  • @marktristan No mortgage, I'm paying off my student loan. That's all. Commented May 18, 2018 at 15:28

2 Answers 2


It will to a certain extent depend on your attitude to risk and the length of time you are willing to hold the funds for.

If you want to retain immediate access to funds, then interest bearing current accounts, savings accounts and/or a cash isa would likely be the be the optimum. However, instant access savings rates are generally below inflation and so effectively you would be losing money.

If are able to lock money away for a short period (a few months to a few years years), Notice-based and fixed term accounts would give slightly higher returns, but may still struggle to keep pace with inflation unless locked away for longer durations (around 5 years). Cycling money from interest paying current accounts into higher paying regular savers would give an above inflation return on a portion of your savings.

As you start moving towards a longer timescale (10 years plus) then funds or trackers through an investment ISA open up as an option. You should consider being more conservative with your portfolio towards the shorter timescales. Don't try and time the markets, and don't worry about short term drops or celebrate spikes.

If you are uncertain of if/when you will want access to the funds, then a blend of the above may be appropriate, allowing you access to some cash in an emergency should you need it, a larger pool of cash for planned expenditure and the remainder in long term investments. Keep reinvesting the interest to benefit from compounding, and drip feed in more savings as you can afford it, and you should see your investment grow in the long term. However, it will likely take a number of years before it grows significantly enough to give you a meaningful side-income.

Other options out there include credit unions, premium bonds (government backed savings where you effectively swap interest for a raffle, with prizes up to a million pounds) and peer to peer savings. You could set up a business, or put a deposit on a property and rent it out. There's matched betting and arbing, but don't try that if you have an addictive personality or are otherwise prone to gambling. These all come with varying degrees of risk and potential reward.


£20,000 isn't really enough to increase your income. 5% is just £1,000 per year.

I'd put an Emergency Fund of 3-4 months worth of expenses in a high yield online savings account (do they have those in the UK), and invest the rest for the long term in an indexed equity fund. Something like the 500 largest companies in the UK.

  • There's a difference between increasing your income versus not making a large income because you have a limited amount to invest. 5% is certainly much better than what MM and CDs pay (in the U.S.). Commented May 18, 2018 at 14:22
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    If I had a choice between receiving 1000 pounds per year, and receiving 0 pounds per year, I'd pick (a). Is that going to radically change your life? No. But it's nice to have.
    – Jay
    Commented May 18, 2018 at 20:21
  • @Jay compound interest is your friend. Your way generates £1,000/year (which you instantly spend) for 40 years for a total of £20,000 + 40*£1,000 = £60,000. My way turns that £20,000 into £147,000 after 40 years.
    – RonJohn
    Commented May 18, 2018 at 21:21
  • Sure ... if you don't need the money now. I'm all for saving and investing. OP said he wanted to increase his income. I was contrasting investing in something that pays 5% versus keeping it in cash that pays 0%. Whether it's better to spend the money now or invest, sure, if you can you should invest.
    – Jay
    Commented May 19, 2018 at 3:47
  • (In the UK, the highest interest rates are currently on current accounts, 3-5%, but only on amounts of a few 1000 pounds. These then often give access to savings accounts with similar rates, but monthly deposit limits. So you can get 3-5%, but with a fair amount of effort if you want to do that for 3-4 months of salary, as you need a handful of them and some current accounts require incoming/outgoing payments too.)
    – nsandersen
    Commented May 19, 2018 at 10:40

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