Best place for a lump sum

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Juneycelestia
Juneycelestia Posts: 7 Forumite
in ISAs & tax-free savings
Hello, I am about to get divorced and will get part of the profit from our house. I plan to use this to pay off my credit and overdraft and save the rest towards a deposit so I can buy a house.

I don't want to have the money locked away for too long. I just want to put it somewhere safe so it doesn't get frittered away. It is too much for an ISA.

Could I put it in a normal savings account?

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  • eskbanker
    eskbanker Posts: 31,066 Forumite
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    The short answer is yes - you may wish to read through http://www.moneysavingexpert.com/savings/which-saving-account and the pages linked from it to weigh up the various options you have. Ulster Bank's new easy access savings account is probably simplest, but you could earn more interest by splitting your lump sum across multiple current and/or regular saver accounts....
  • LittleJo
    LittleJo Posts: 482 Forumite
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    Hi
    Be aware the bank guarantee is limited to £80000.
    Different rules apply to sale of house, ask bank to be sure.
    Jo
  • eskbanker
    eskbanker Posts: 31,066 Forumite
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    LittleJo wrote: »
    Be aware the bank guarantee is limited to £80000.
    Close, but the FSCS limit is actually £85,000 - you're right to mention the limit but if OP was going to be left with more than £85K after settling debts then I suspect that saving for a deposit wouldn't be necessary!
    LittleJo wrote: »
    Different rules apply to sale of house, ask bank to be sure.
    The FSCS does include a temporary high balance provision that protects larger sums under certain scenarios, as per https://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-temporary-high-balances/. However, as per FAQ #2, this is limited to six months.
  • Juneycelestia
    Juneycelestia Posts: 7 Forumite
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    Thank you. This is really helpful. I should have about £25k once everything is settled. Which I thought would be enough for a deposit for a 2 bed flat but isn't on my salary so hoping to save more.

    Will definitely look into Ulster Bank's savings account. I read the article that was very interesting.

    I will also look into splitting it. I think I saw NatWest current account had high interest rate for a year I could look into that too.
  • jimjames
    jimjames Posts: 17,622 Forumite
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    Juneycelestia wrote: »
    I will also look into splitting it. I think I saw NatWest current account had high interest rate for a year I could look into that too.

    Not sure which you've seen but I'm not aware of any Natwest current account that pays interest at a high rate. Plenty of others do.

    However you said that it was too much for an ISA which is true but only just and may have impacted some of the replies. The ISA limit is £20k now. Not saying a cash ISA is a good idea but look for whatever pays most interest
    Remember the saying: if it looks too good to be true it almost certainly is.
  • isasmurf
    isasmurf Posts: 1,999 Forumite
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    Juneycelestia wrote: »
    I don't want to have the money locked away for too long.
    How long is too long?
    You could look at notice accounts. Paragon has a 120 day notice account with a rate of 1.45%.
    Alternatively, Hampshire Trust has a 90 day notice account at 1.40%, although you can only operate this account by post
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