£65,000 in a B'Ham Midshires Account which needs to be moved Advice please

Princess_Fiona_2

A friend has asked my opinion on the following.

her mum who has an account in Birmingham Midshires which is due to close next week. Account contains approx £65,000. Lady is in her early 70's so does not want to put her money any where risky. Just basically wants to leave it alone somewhere although if needed she could get to it easily enough. So i thought you lovely folks out there could give me some info to pass back. Thanks. PF

innovate

If she wants instant access, she should distribute the savings across ISAs and high interest paying savings accounts, probably in the following order

1. £3K into an ISA now
2. open at least one Regular Saver and start paying into it
3. distribute the rest into three top interest accounts (to stay under the FSA guaranteed sum [23K?] in each).
4. pay another £3K into ISA each April (either the same ISA or open new one if it pays better interest)
5. move money from regular saver(s) back into high interest accounts, or new regular saver(s) when the attractive rate comes to an end (mostly after 12 months)

To transfer money into the regular saver(s), she should ideally have a current account(s) with the bank(s) she has the regular saver(s) with

The above needs regular management, ideally via Internet banking. Egg Money Manager might be a useful tool to keep taps on the most current balances.

If this sounds all too daunting for the lady, and she isn't happy for her daugher or someone else to do the management for her, splitting the money into three or four high interest savers would be the next best option. The other option could be savings bonds.

For additional ideas and best rates, give the lady and her daughter Martin's articles on best buys for over 60's andmaximising your interest.

dunstonh

What is risky and what isnt? There are low risk investments that can carry guarantee of capital on death. That way, she can take a small risk with some but be happy that if the worst happens, the money is still safe. They also allow withdrawal without penalty too.

home_alone

I am also not as young as would want to be so I am with ing 4.5 but looking at newcastlenet 4.9 both with no added bonuses and instant and extremely easy to use.

gary

innovate

Just another thought (sorry if it's a bit morbid, but we all need to be realistic): if the lady wants to grow the money with the intention to leave it to someone on her death, she shouldn't necessarily keep all of it in her name, because of Inheritance Tax. If this applies, check out the HMRC pages on IHT , or ask specific questions that someone on the board may be able to answer.