The best way to invest £10k

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If you’ve recently come into some money or you’ve been saving (and have already set aside an emergency fund in an accessible savings account), and you now have £10k to invest, you’re probably wondering the best way to maximise it.

Choosing to invest is a great way to generate some income, but it does come with an element of risk that it’s important to be aware of before you commit. In this guide we explore your options for where to invest £10k and give our top tips for investing. We also consider alternatives to investing, such as opening a high-interest savings account like a fixed rate bond.

Key takeaways
  • Financial goals: Whether it’s best to invest, save or spend your £10k depends on your individual financial circumstances and savings goals

  • Investing £10k: If you have a £10,000 lump sum to invest, you may want to consider buying stocks and shares, bonds or commodities

  • Risk: You should only invest in the stock market if you’re comfortable with taking on risk. If this isn’t for you, opening a competitive savings account may be a better option

What to do with £10k?

If you find yourself with a substantial amount of extra cash, you typically have three options when it comes to what to do with it. These are as follows:

Save the money – You could set up a savings account with the bank or building society of your choice. Your money will be protected in the event of collapse thanks to FSCS protection, and if you think you’ll need to access your cash quickly, you can open an account which allows you to do so, such as an easy access savings account.

Invest the money – Many people choose to invest to generate income from a lump sum. There are many different types of assets to invest in, and we’ll explore some of them in this guide. With investing, there is usually some element of risk since the asset could fail and you could lose some or all of your money.

Do nothing – If you do nothing with your money, or withdraw it and store it in a safe place, you won’t earn any interest and your cash won’t be protected.

Should I save or invest £10,000?

Choosing whether to save, invest (or spend) your £10k is ultimately down to your financial situation and personal preferences. Saving is ‘safer’ than investing, since your deposits are protected as long as they’re under £85,000 per person, per banking group. If you don’t have a strong appetite for risk, this could be a better option for you.

If you’re thinking of investing £10k and are new to investing or are unsure of how to manage your finances, you might want to seek independent financial advice so you avoid making any mistakes.

Is £10k a good amount of money to invest?

Yes, £10,000 is a good starting point for growing your money, but to get a good return, you’ll probably need to keep it invested for around five years, if not longer. That’s because the stock market is volatile and your investments go down as well as up, but will generally maintain an upward trajectory over a long period of time.

Before choosing where to invest £10k, you might also want to consider the following questions:

  • Do you currently have outstanding debts that you could pay off instead?
  • Are you happy to give up or restrict your access to your money while it’s invested?
  • Are you planning a big life change or event, such as getting married or having a baby, that you might need the money for?
  • Would it make more sense to make overpayments on your mortgage to avoid paying thousands of pounds extra in interest?

Where to invest £10k?

What to do with £10,000 is, of course, entirely up to you. One thing to be aware of is that with investing comes risk, and with risk comes unpredictability. The world of investing can seem overwhelming for those who don’t know their bonds from their shares, so we’ve highlighted seven of the best ways to invest £10k below:

1. Investing £10k in your pension

If you were to invest £10k into your pension pot, you’ll not only benefit from government tax relief, but also from the free cash top-ups from employers if you’re in a workplace pension scheme.

For the self-employed, it might be good to consider a self-invested personal pension or ready-made personal pension. Ultimately, investing in a pension is investing in your future.

2. Stocks & shares ISAs

Stocks and shares ISAs are a great short to medium term investment option for tax efficiency. You won’t have to pay any income or capital gains tax on the interest you earn when you invest £10k into a stocks & shares ISA.


When you buy stocks and shares in a company, you’ll earn money when the value of that company goes up. While this, of course, has an element of risk to it since the company’s value could also go down, you may also benefit from receiving regular dividends if the company does well.

4. Bonds

Bonds represent a company or government debt. When a company or government issues a bond, they are issuing debt with an agreement to pay interest against the money you’re loaning them. They typically pay out annual interest while repaying their debt. Bonds are often considered a safer type of investment than stocks, especially for short-term investors.

5. Investment funds

An investment fund is where you pool your money or capital along with other investors to invest collectively and therefore make more money. With investment funds, however, you don’t have the same voting rights as you would with shares, but they are considered lower risk than just investing in one company.

6. Property

Investing in property, particularly in the buy-to-let market, is seen by most people in the UK as one of the safest forms of investment, generating reliable income in the form of rent. However, you must also consider the risks posed by the housing market and weigh up the value of your prospective returns against your mortgage.

7. Commodities

Commodities, such as precious metals, oil and stones are another option for investing. These, however, are subject to the same unpredictable fluctuations as other investments. You can usually invest in commodities via an Exchange Traded Fund, or ETF.

Putting your money into a savings account with a competitive rate of interest is also a form of investing. If you’re looking to diversify your investment portfolio and keep some access to your cash, you might be better off investing your money in savings accounts with competitive rates of interest.

How to invest £10k?

There are two methods to choose from when it comes to investing £10k.

You can either take the DIY approach of picking your own investments and managing them yourself, or turn to a fund manager or robo-advisor who will use their expertise or computer algorithms to invest your money for you.

If you’re completely new to investing, it might be worth considering the second option so you can tap into existing knowledge and investing advice.

Should I see a financial advisor?

If you’re unsure about whether you should choose to invest or save your money, or you don’t know where to invest £10k, you might prefer to consult a financial advisor before making any decisions on what to do.

A financial advisor will be able to:

  • Consider your position impartially and select the best product for you
  • Provide expert, insider knowledge into investing trends and what works
  • Take away the stress and time of trying to do it all yourself

What are the risks of investing £10k?

If you’re wondering about the best way to invest £10k, you first need to address your appetite for risk. In simple terms, this means you need to ask yourself the following questions:

  • How do I feel about losing money?
  • How much money am I comfortable with losing?

Investments can be volatile, and your £10,000 is likely to dip below that amount as the value of your investment ebbs and flows. Is that something you could deal with? Or would you be likely to panic?

Only if you’re certain about the answers to the above questions should you consider investing your money. If you don’t have a strong appetite or capacity for risk, you may want to consider putting your money into a savings account, which provides greater security. Fixed rate bonds, for example, provide competitive interest rates and the peace of mind of knowing how much you’ll earn at the end of your fixed rate term.

Investing £10k ethically

If you feel strongly about a particular cause, such as climate change, you may want to ensure that you’re not investing in anything that conflicts with your beliefs.

The good news about this is that relatively new legislation (2021) is tightening the rules on what banks have to disclose in terms of their own investments, making it easier for you to consider ethical banking.

Investing £10k for the best return: our tips

Investing might seem like something that’s reserved for the experts, and while it isn’t child’s play, it can be simplified into the following steps:

  1. Have an ideal timeframe in mind
  2. Set your savings goal (e.g. £15,000 for a wedding; £30,000 for a house deposit)
  3. Invest efficiently, taking advantages of tax allowances and low costs
  4. Mitigate your risk of loss by diversifying your portfolio
  5. Don’t be impulsive, either when your investment drops in value or in choosing your initial investment. Remember that investing is often about playing the long game.

Alternatives to investing

As we’ve shown, there are lots of ways you can invest £10k. However, if you’d prefer peace of mind that your money is completely safe and protected from any stock market volatility, putting your money into a savings account may be a better option.

Fixed rate bonds could be ideal if you have a lump sum that you can afford to lock away for a set period of time without needing access to it. Plus, they tend to offer the most competitive interest rates of all account types, with the highest rates typically available on those with the longest terms.

You can compare a range of high-interest savings accounts from our partner banks in the Raisin UK marketplace.

Simply login or register for a Raisin UK account today to get started.