Proceeds from house sale

cacique

I am in the process of selling my house and will be buying a house in France with the proceeds, and retiring there.

if I haven't found a house to buy by the time my UK home is sold, I will have approx. £250,000 which I would like to put in an instant access savings account so that I can gain some interest while I'm renting.

After reading through the forum, I gather that I should put no more than £35,000 in any one account to make sure it is protected.

That would mean I have to have 8 different accounts.

Would it be sensible to open all these accounts now, so that when I get the money it can be paid in immediately?

Or, alternatively, as I already have an egg card, should I just open a savings account with them and pay the whole lot in there - crossing my fingers that they don't go bust!!

I'm finding it hard to decide what to do :undecided

I guess it's just a matter of whether to take the easy route and lose some interest, or go down the more time consuming route to gain more!

Does anyone have any experience of this and/or opinion or advice?

Many thanks for any thoughts

opinions4u

8 is probably overdoing it a bit. Don't forget the FCSC has about 0.4% of the nations liquid savings in it, so if anybody went under we're all doomed anyway. Go for 3 or 4, and remember joint names get double the limit.

Open an Egg account now with a nominal amount and you get 6.3% fixed for a year with instant access.

If rates have dropped by the time your sale comes through, you can still get that 6.3% until the year is up.

Moggles_2

Presumably, you need accounts which can be opened quickly. In these circumstances, I would look at your existing provider(s) first. If the money is in a current account, consider opening your bank's internet savings account.
Caution: if you bank with Alliance & Leicester, HSBC or First Direct, I believe some of their internet savers pay no interest at all during any calendar month in which you make a withdrawal, so I would avoid those.

If only a market-leading interest rate will do (and you're prepared for the extra effort involved), I can certainly recommend Kaupthing Edge, Icesave and Bradford & Bingley's Internet Saver 3.

All are easy access online accounts with monthly interest options. Quick and straightforward to open as well. I hold all three a/cs, but feel Kaupthingy and IceSave have the edge because of their valuable interest rate guarantees.

Provided that you're on the electoral roll, all three check your ID electronically and cheques are not essential. You can make your initial deposit by direct debit (or with KE, BACS transfer) from your current account, if you wish

ukmike

Northern Rock has unlimited protection.

Mikeyorks

As post #4 - put it all in either Northern Rock or NS&I, where you get full protection. They don't offer the top rate - but your OP doesn't suggest you're looking for that? And opening 8 separate easy access accounts - whilst avoiding the ones who are linked (Halifax / BM et al) - is a total pain if you aren't tucking it away for a longish period.

opinions4u

I think we all need to look at the 'unlimited protection' that people think a government guarantee brings and take it to the extreme.

If the country was in a dire economic state, where would the guarantee be funded from?

Even in today's uncertain times, the taxpayer hands over around 45% of income in direct and indirect taxer to be spent on our behalf.

If Northern Rock sank completely out of sight, unemployment trebled (to early 80s levels - it has been there) and the remaining taxpayers were called upon to find another £20bn, it simply wouldn't be there.

The government could choose to borrow to pay it - but who would lend in these circumstances?

The same applies to the wider FSCS - there's naff all money in the pot and if somebody goes under the government has to borrow. In exceptionally tough times where does this money come from?

Final extreme - if we end up with a Zimbabwe type economy in the UK (it only took a couple of years to change from 'breadbasket of Africa' to 'basket case') nobody is going to be lending the government funds to bail out a small % of savers in a failed bank.

The Fscs and government guarantee are a smoke and mirrors protection that couldn't cope in genuinely tough times. But sticking your money in a bank is still safer than hiding it under the mattress.

cheerfulcat

opinions4u wrote: »

The same applies to the wider FSCS - there's naff all money in the pot and if somebody goes under the government has to borrow. In exceptionally tough times where does this money come from?

The FSCS is not government ( taxpayer ) funded - it is paid for by financial institutions.

opinions4u

cheerfulcat wrote: »

The FSCS is not government ( taxpayer ) funded - it is paid for by financial institutions.

My point is that it isn't actually funded significantly by anybody.

The "fund" has about 0.4% of all UK savings balances in it. If a bank went under (e.g. £20bn Northern Rock size), £16bn would have to be found somewhere quickly.

The other banks would be asked to fund this and simply don't have the cash. Therefore the government would have to lend the money to the banks who would have to repay over the following years.

If the nation's finances are up the creek without a paddle, who would lend to the government to allow them to lend to the banks?

project500

Is money better in paid for property rather than savings if heaven forbid a super crash occurs ?Do we need to be thinking of paying off our mortgage debt if things get really bad? Because presumably we will loose our cash savings unless we put them in something solid .

opinions4u

project500 wrote: »

Is money better in paid for property rather than savings if heaven forbid a super crash occurs ?Do we need to be thinking of paying off our mortgage debt if things get really bad? Because presumably we will loose our cash savings unless we put them in something solid .

Don't worry. If things get really bad the value of property will crash significantly too! Much more than the recent "correction" to prices!

project500

Yes I can see that could well happen but at least with the deeds to you real estate you would have something that you did in fact own for any future restart or re structure.With cash in a bankrupt system you would have nothing to show for it.Just thought it made sense to have something.