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What are the best lump sum investments

If you are considering lump sum investments and you are looking for the best possible return you should be prepared to have it tied up for at least two years. Most high street banks offer fixed rate interest accounts, or notice accounts, with the deal that for the higher rate of interest, you don't make any withdrawals for the set time period.

Although interest rates are nowhere near as high as they were five years ago thanks to the credit crunch, you can still expect an interest rate of 4.60% and more for a term of five years. Of course, your lump sum investments will have to remain with the account for this time period for you to take full advantage of this loan rate. In the event of an emergency, it is possible to make a withdrawal on this type of account, however this is usually subject to a penalty fee and lost of interest accrued. If you are at all unsure about how long you can leave your money tied up, you should shop around for an account that has a free withdrawal each year for no fee.

One of the best lump sum investments accounts is available with Nationwide who offer a 3.12% interest rate fixed for 12-months. The minimum investment is £1,000 and you have the chance to make one penalty-free withdrawal within the year. This account is suitable for people who want to make a lump sum investment without having to have their money tied up for a long period of time.

Tesco offer a 2 year fixed rate saver, with an interest rate of 3.60% APR. The minimum investment is £2,000 and you cannot add to the amount invested once 30 days have past from you opening the account. The interest is paid annually to a different account of your choice and you are not allowed to make any withdrawals without a penalty fee and possible loss of interest.

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