Over 500K to invest...

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1stTIMEseller_2
1stTIMEseller_2 Posts: 1 Newbie
in Savings & investments
My husband and I are selling our home. Once all expenses are paid, we will be left with approx. 1mil to buy our next home. We are going to rent for a few months (6months to 1 year), whilst we look for our ideal home. How can we invest this large amount of money instead of having it simply sitting in the bank, before we spend most of it on our next home? It seems to me that ISAs and tax-free Savings are for smaller amounts of money? We would need to have access to the bulk of the money quickly, should we find the ideal property to buy and move into. Many thanks for any advice the community can offer.

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  • ColdIron
    ColdIron Posts: 9,049 Forumite
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    For that sort of timescale the most practical solution IMO is one of the NS&I products like the Direct Saver at 1.1% or maybe their Income Bonds at 1.25%. Rates aren't great but your cash is 100% safe as it's effectively the Treasury and no notice is required

    http://www.nsandi.com/savings-direct-saver
    http://www.nsandi.com/savings-income-bonds
  • chucknorris
    chucknorris Posts: 10,786 Forumite
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    It is a real problem, I have mostly moved out of cash and into shares and DB pension (my real money is in property). But obviously 6-12 months is far too short a period to invest in shares, so you are stuck with below inflation, net savings rates and you will lose money (especially if as expected house prices continue to increase).
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • HawkE
    HawkE Posts: 45 Forumite
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    If you are only looking at 6 months to 1 year then Cold Iron's suggestions seems sensible as it is the lowest risk to your capital and you don't need to worry about the £85k FSCS limit on bank a/cs - that's because NS&I is guaranteed by the government.


    I would not over-react to the comment above about 'losing money'. If you were talking a number of years then the effects of inflation reducing your purchasing power would be relevant but for 6-12 months the effect is relatively small...and if you go with NS&I option you know that your money is safe.
  • BarrBru
    BarrBru Posts: 37 Forumite
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    You need to keep it in cash or near cash so don't be expecting a big return because there nothing to be made from cash these days whilst interest rates are so low.
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