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  • FIRST POST
    • d000hg
    • By d000hg 10th Oct 16, 1:14 PM
    • 76Posts
    • 9Thanks
    d000hg
    Savings interest on larger balances?
    • #1
    • 10th Oct 16, 1:14 PM
    Savings interest on larger balances? 10th Oct 16 at 1:14 PM
    All the MSE "top savings" accounts seem to be limited on a balance of £2,500 - £20,000.

    I have £200k (from an inheritance) which I expect to be investing in a house in the next few months. So property and shares are not sensible options.

    Is there anywhere I can put this sum to earn interest on the whole balance? My 1-2-3 account is maxed out and while I could get a 2nd for the wife it requires a bit of mucking about with DDs and so on.

    Where can I compare interest rates for larger balances? Even after getting another 1-2-3 and perhaps maxing out cash ISAs I'd have £100k sitting there doing absolutely nothing.
Page 1
    • bowlhead99
    • By bowlhead99 10th Oct 16, 1:21 PM
    • 5,124 Posts
    • 9,051 Thanks
    bowlhead99
    • #2
    • 10th Oct 16, 1:21 PM
    • #2
    • 10th Oct 16, 1:21 PM
    National Savings & Investments monthly interest bonds - pays 1% and government backed.

    For comparison tables see the financial comparison sites including MSE articles, their owner moneysupermarket, and all their rivals you see advertised on telly (meercats, mad operatic guy etc). Take care not to confuse safe bank accounts with peer-to-peer lending which carries more risk.
    Last edited by bowlhead99; 10-10-2016 at 1:25 PM.
    • badger09
    • By badger09 10th Oct 16, 1:54 PM
    • 4,266 Posts
    • 3,480 Thanks
    badger09
    • #3
    • 10th Oct 16, 1:54 PM
    • #3
    • 10th Oct 16, 1:54 PM
    If you envisage using the whole £200k for a house purchase within the next few months, then it isn't worth faffing about with multiple accounts for the few £ you could earn.

    bowlhead99's suggestion is the sensible (and unusually brief) answer.
    • d000hg
    • By d000hg 10th Oct 16, 2:05 PM
    • 76 Posts
    • 9 Thanks
    d000hg
    • #4
    • 10th Oct 16, 2:05 PM
    • #4
    • 10th Oct 16, 2:05 PM
    Thanks you two. Yeah it's not worth a lot of hassle but at 1% that's £166 a month which is neither to be sniffed at... could easily end up being £500-1000 depending on timescales. So worth a bit of faff but not messing about with loads of little accounts in my view.
    • YorkshireBoy
    • By YorkshireBoy 10th Oct 16, 2:27 PM
    • 28,320 Posts
    • 16,128 Thanks
    YorkshireBoy
    • #5
    • 10th Oct 16, 2:27 PM
    • #5
    • 10th Oct 16, 2:27 PM
    Thanks you two. Yeah it's not worth a lot of hassle but at 1% that's £166 a month which is neither to be sniffed at... could easily end up being £500-1000 depending on timescales. So worth a bit of faff but not messing about with loads of little accounts in my view.
    Originally posted by d000hg
    Gross, yes. But you will possibly (probably?) have some tax to pay on that.

    Had Santander not cut their rates from next month I might have suggested 2 more 123 accounts (for approx. £100 a month) and a punt on Premium Bonds with some of the rest?
    • d000hg
    • By d000hg 10th Oct 16, 2:38 PM
    • 76 Posts
    • 9 Thanks
    d000hg
    • #6
    • 10th Oct 16, 2:38 PM
    • #6
    • 10th Oct 16, 2:38 PM
    You get £1000 of tax-free savings interest annually (right?) so I think I'd be doing well to start getting taxed. I do a SATR so could reclaim pre-taxed interest.
    • polymaff
    • By polymaff 10th Oct 16, 3:11 PM
    • 1,279 Posts
    • 510 Thanks
    polymaff
    • #7
    • 10th Oct 16, 3:11 PM
    • #7
    • 10th Oct 16, 3:11 PM
    You get £1000 of tax-free savings interest annually (right?) so I think I'd be doing well to start getting taxed. I do a SATR so could reclaim pre-taxed interest.
    Originally posted by d000hg
    Somewhere between 0 and £6,000, actually - depending upon your circumstances - and there is no pre-taxed savings interest now.

    Like bowlhead suggests (?), I've gone down the NS&I Income Bond path recently - particularly to accumulate multiple maturities. Shoved some of it into Premium Bonds and got £75 this month
    Last edited by polymaff; 10-10-2016 at 3:29 PM.
    • bigfreddiel
    • By bigfreddiel 10th Oct 16, 8:33 PM
    • 4,072 Posts
    • 1,865 Thanks
    bigfreddiel
    • #8
    • 10th Oct 16, 8:33 PM
    • #8
    • 10th Oct 16, 8:33 PM
    We got £100 winnings from pbs this month
    • jeepjunkie
    • By jeepjunkie 11th Oct 16, 7:42 AM
    • 1,274 Posts
    • 1,263 Thanks
    jeepjunkie
    • #9
    • 11th Oct 16, 7:42 AM
    • #9
    • 11th Oct 16, 7:42 AM
    Hmmm... Wonder if PBs are a good home for £30k of stoozed funds?
    • polymaff
    • By polymaff 11th Oct 16, 9:11 AM
    • 1,279 Posts
    • 510 Thanks
    polymaff
    Hmmm... Wonder if PBs are a good home for £30k of stoozed funds?
    Originally posted by jeepjunkie
    Premium Bonds can be treated as an investment, not a gamble. The recent non-gamble rate is 1.14% which, to a 40% tax-payer is the equivalent of 1.9%.
    • northbob
    • By northbob 11th Oct 16, 2:34 PM
    • 53 Posts
    • 7 Thanks
    northbob
    I would agree if you have that much cash and need flexibility then a max 50k on PBs should return close to 1% on average. With a remote but possible bigger upside which is OK as it sounds like if the rest gets 1% elsewhere you won't be too down if the PBs don't return much.
    • jm78
    • By jm78 11th Oct 16, 4:29 PM
    • 6 Posts
    • 0 Thanks
    jm78
    National Savings & Investments monthly interest bonds - pays 1% and government backed.
    Originally posted by bowlhead99
    Now that all my higher interest bonuses have expired, I'd love to get my savings out of the banks and put them in NS&I monthly interest bonds, but is this advisable longer term given the lack of compound interest? Is there any clever way around this, like some way to reinvest the interest?
    • bowlhead99
    • By bowlhead99 11th Oct 16, 4:54 PM
    • 5,124 Posts
    • 9,051 Thanks
    bowlhead99
    Yes. Re-invest the interest. Or leave the interest earning interest in one of the accounts that pays a decent rate on small amounts and hasn't expired.
    • d000hg
    • By d000hg 14th Oct 16, 12:54 PM
    • 76 Posts
    • 9 Thanks
    d000hg
    I had initially thought I want to keep the cash instantly accessible but on reflection it seems to me that paying off mortgage debt would achieve the same thing - when I move house the cash tied up in my home is realised at exactly the right time?

    My mortgage rate is currently 1.34% (until May) so is it correct to say that paying off a chunk of this is basically the same as investing it somewhere that pays me 1.34% interest as my mortgage bills fall? Because 1.34% is pretty decent in relative terms.
    • bowlhead99
    • By bowlhead99 14th Oct 16, 1:21 PM
    • 5,124 Posts
    • 9,051 Thanks
    bowlhead99
    If you pay off your mortgage you save interest that you would have had to pay out of your after-tax salary. So it is like receiving 1.34% savings interest after tax (assuming there's no "early repayment charge" to spoil the party).

    If paying off a huge wodge of the balance you might even drop an LTV category and qualify for an even better rate on the remaining balance if you do a quick remortgage, ie saving interest on the bit you haven't even paid off yet.

    The difference of course is that if some unexpected event crops up, and you want to get your hands on (e.g.) a few thousands or tens of thousands which you paid off your mortgage early, the only way to do it may be to ask for a remortgage which requires credit check /affordability, potential fees, risk that the low 1.34% rate may no longer be available, etc etc. This may not be suitable for some people.

    In your case it seems like you will be selling the house pretty soon so will get access to the 200k again. Hopefully there is no problem selling it quickly and your plans don't change.
    • d000hg
    • By d000hg 14th Oct 16, 1:44 PM
    • 76 Posts
    • 9 Thanks
    d000hg
    The mortgage is for £165k and the house was bought for £235 (on sale for £260k) so my inclination is to pay off £100k - I then have substantial cash left but also benefit from effectively getting 1.34% on £100k which isn't bad.

    Good thinking - I'd never considered the LTV band change; I've no idea what's on offer but my mortgage has no over-payment or termination penalties. Although I can't see much better than 1.34% being on offer?!

    The current discounted rate runs to May when we hope to have moved already. I hadn't thought that it made any sense to remortgage when we only expect to be here 6 months at most, my fear would then I might get stung for early termination. I suppose it can't hurt to have a quick look around.
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