What’s the best thing I could do with ~£1,000 that I don’t need to touch for six months?

[me123321]

Getting my Christmas bonus soon and am going on a lads’ trip to the Euros in June. I’m going to put a grand aside as my spending money (everything else is paid for). What’s the best, safest thing I can do with that money that will turn it into a little bit more? I have Revolut; their vaults pay alright-ish interest (I think) - is that a good idea? (I also technically have accounts with Starling and Monzo but they haven’t been used in years so may be dead - I can check if advice suggests I should)

The fact that I’ll need the money as Euros is relevant I think - I don’t really want to use a credit card to withdraw cash abroad and Germany is really slow on the uptake with contactless etc.

For further context I have a little bit of credit card debt but nothing horrific (it’s being paid off at a good rate), and a middling but improving credit rating, so if I need to apply for something new I can do so but it maybe wouldn’t be a guarantee.

Thanks for any advice and apologies if I’m not asking in the right place or the right way.

 

[treyarch1]

@me123321 For the next 6 months:

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

When it's time to travel:

https://www.moneysavingexpert.com/travel/cheap-travel-money/

If you're paying hefty interest on the credit cards, it would be a better plan to pay them off with the bonus, and then save up from what you would have spent on repayments.

 

[me123321]

@treyarch1 !thanks

I’m getting a fair bit more than the £1k for my bonus and it’s being used to service the debt (to completion, mostly, but not quite entirely). Definitely an argument for using the £1k I’ve earmarked for my holiday to get closer to closing the debt but I’m curious to see if there’s something better I can do with it. Thanks for the links — going to check them out.

 

[socalexile]

@me123321 Why wouldn't you use the £1000 to pay off the credit card debt?

It sounds like what you're looking for is an easy-access savings account. MSE has a guide: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/#easyaccess

 

[me123321]

@socalexile Just seen I think I’m meant to say !thanks here

 

[me123321]

@socalexile Thanks for the link, going to check that out!

The credit card debt is being paid off monthly at very, very little cost in interest. I reckon I can make more in interest with the £1k in the right account, than I can save by paying off the CC. I might be wrong, but that’s why I’m asking. Thanks again for your reply.

 

[socalexile]

@me123321 You almost certainly are wrong. Credit card interest will always be higher than the interest you earn on savings accounts.

Put £1000 in a 5% saving account for a year and you make £50.

Now let's say you had £1000 in cc debt with an APR of 23% (about average). Over a year you'd pay £230 in interest.

In that situation you'd save £180 by paying off the credit card.

 

[me123321]

@socalexile !thanks

This is the basic breakdown I really needed, and I’m grateful

 

[rachel96]

@me123321 Pay off your credit card debt now.

 

[me123321]

@rachel96 I fear I’ll spend more in forex fees by having to use the CC in Germany, than I’ll save in interest by paying off the card. I haven’t done the maths… (but I’ll come back to you when I do)… is this a legitimate concern or am I making stuff up?