What to do short term with proceeds from house sale?

JULIAAH

Please can anybody advise? I will shortly be completing on a house sale, but my purchase is nowhere near completion (I am living elsewhere in the interim). What can I do with approx £200,00 short term (probably a couple of months). I know about the £50,000 protection, so could split the sum between four banks. But if one of them were to fail, would I get my money back immediately (I'd need it for my purchase)? Would I be best looking at "alternative" banks (eg Tescos, but they have limits on how much you can withdraw)? What about Building Societies, or National Savings (despite the low interest rates)? I see from the article "Are your savings safe?" that Northern Rock might be the safest place for the whole lot - is that still the case (Jan 10)?
Many thanks

vegasvisitor

Not sure if you are investing in joint names, but for a couple investing in the one bank (joint account) the figure is doubled. So you could just split between 2 banks. really.

Also try to invest just under the £50k per bank to allow for interest to be added. May not be a major issue since you're only investing for a few months though. I doubt you'll have great options with you wanting to have the money back so soon you won't want any type of notice account.

cottager

One to consider might be Ulster Bank's Pathway account: 3.60% gross (3.10% AER) including a 1% bonus for 6 months. Instant access, minimum £10k to open, and if the balance falls below this you'd drop to the underlying rate.

With Ulster Bank you have Faster Payments, so assuming the destination bank can receive FPs you should be able to get your money out at the rate of £10k per day* (the maximum daily withdrawal limit) as you approach the point when you need it.

* Because the Pathway is a savings account, not a current account, I've checked with Ulster Bank that FPs outwards are available, and been verbally told they are, but if considering it you should check yourself to be sure you would have this type of access as you run up to the point when you need your purchase funds.

Ulster Bank is part of the RBS group.
http://www.ulsterbank.co.uk/ni/personal/saving/instant-access/pathway.ashx
and 0800 046 6486

Reaper

The simple answer is to put it with a government owned bank such as Northern Rock or NS&I then you can forget the £50k limit.

franklally

Reaper wrote: »

The simple answer is to put it with a government owned bank such as Northern Rock or NS&I then you can forget the £50k limit.

Reaper does this mean you can invest more than 50k and be covered should the bank go bust?

JULIAAH

Thank you for your responses, and particularly to Cottager for finding out about Ulster Bank.
My primary concern is safety, and ease of access, above interest (although I'd hope to get some interest!). I'm worried that if I invest in any bank, and they go bust, I wouldn't get my money back immediately, would I? It just feels too risky (given that these days completion of property purchase seems to come so soon after exchange of contracts). I guess I'll have to stick with NS&I, despite the lousy rates.
Thanks again.

Reaper

franklally wrote: »

Reaper does this mean you can invest more than 50k and be covered should the bank go bust?

Yes because government owned banks can't go bust unless the UK government goes bust - and if that happened we would all be done for anyway!