Best Savings Account for £41k

Helen_from_yorkshire

Currently have £41k which I want to deposit into a savings account until 01.09.06 when I will withdraw it and use it to pay off my mortgage.

Both me and hubby have used our ISA allowance for this year.

All suggestions greatly appreciated.

Thanks

Helen

moneysavingobsessive

As its such a short time and quite a large amount of money, (if it was me) I'd simply look for the highest interest rate including short term introductory bonuses.

I think, at the moment, A&L online saver is one of the highest payers at 5.15%, but if there are higher, I'm sure someone will correct me!!!

Should make about £4.60 a day after 20% tax.

mad

Do you both work? If one of you does not you may be able to utilise unused tax allowance

bogan

Hi Mad, could you tell me more about utilising unused tax allowance. I have about 20k to invest for a year until i can pay it off my mortgage. I work whilst my wife looks after the kids. We both have isa's so i'm looking at putting it into an ICICI account. Could I open the account in her name and utilise her tax allowance and if so how would this work? Thanks for any advice. Bogan.

Helen_from_yorkshire

Unfortunately we both do work Mad.

Thanks for the info re A&L Online Saver, I'll need to check whether I need one account or two in case there's an upper limit.

cloud_dog

bogan wrote:

Hi Mad, could you tell me more about utilising unused tax allowance. I have about 20k to invest for a year until i can pay it off my mortgage. I work whilst my wife looks after the kids. We both have isa's so i'm looking at putting it into an ICICI account. Could I open the account in her name and utilise her tax allowance and if so how would this work? Thanks for any advice. Bogan.

For an existing or a new account just ask the savings account provider for an R85 form (or got to https://www.hmrc.gov.uk/forms/r85.pdf download it and print it off). It is simpler if the account is in just your wife's name but even if it is joint names you can ask the IR to allow a percentage to be paid gross (not sure how a society / bank would handle this).

Also for higher rate tax payers ensure any investments that regularly pay dividends are in her name.

cloud_dog

roswell

Just be carefull if your wife is on amy benifits as getting a 20 K savings account could change the benifits she gets considerably

mad

Thanks clouddog, beat me to it on the R85 form. Everyone has an annual limit of £4895 if under 65, over 65 and it goes up. Basically if that individual has no other income then interest on savings is free of tax up till that point. So 20k over a year at 5.15% would give £1030 interest still easily inside the allowance. I am not certain on the state benefits but as you can see on the form things like Child Benefit / Working tax credit don't have to be taken into account