Best options to invest 250K in short term following house sale

locky123

We are relocating this summer and have just accepted an offer on our house. We will then be renting for about 6 months, before hopefully buying our next house.

Our offset mortgage, current and savings are with First Direct.

We want to have easy access to the 250K during this period, but make it work as best we can in these difficult times for savers.

Can anyone recommend suitable investments for this situation?

topgearfan08

id say 6 month bond, but thats not easy access... so just go for the highest savings accounts payiong monthly interest...

remember no more than 50k per person in one place.... spread it!

topgearfan08

sorry didnt read the offset mortgage bit... i take it this 250k is after the mortgage is repaid?

locky123

Yes 250K after mortgage is redeemed.

At this stage a 6 month bond is not attractive, what rate would it be?

So looks like 2.8% for easy access savings account and maybe some in Premium bonds as well. There are 4 of us incl 2 children.

So sounds best not to have more than 50K in any single account. Is the risk still really there?

DiggerUK

locky123,
As you have found out, interest rates will not get you much at the moment. Even at 3% net you are talking less than 400 pound.
Have some fun, go with the Premium Bonds, with *6 of you that's 180K taken care of. "Instant Access" with PB's is 6-10 days by the way.
The other 70K will still net you enough for a weekend at the seaside.

Best of fortune.

*Edit, just noticed you are a nuclear family. Adjust figures to 120K plus a week at seaside.

debbie42

DiggerUK wrote: »

locky123,
As you have found out, interest rates will not get you much at the moment. Even at 3% net you are talking less than 400 pound.

How are you working that out?
£250K for 6 months at 3% net is £3750, or £625 p.m.

DiggerUK

debbie42 wrote: »

How are you working that out?
£250K for 6 months at 3% net is £3750, or £625 p.m.

Ergghhh, very badly Miss. Won't happen again.
Anyway, it's only a zero missing, banks do that all the time, and then get paid shed loads of money. Why you picking on me Miss.

gmgmgm

NS&I Direct Saver is 2% I believe, and you're safe for up to £1m. Much easier than opening five bank accounts.

sabretoothtigger

For an extra grand I'd take the hassle personally but maybe Im on the wrong website


If you buying a house in 6 months then arrange the mortgage finance deal now so you can get a nice fix rate while they still exist, in the end that is more important then measly savings rates for 6 months

invest 250K in short term

invest and short term are contradictory. Has to be various savings account in that case

stilernin

Only a small part of £250k but you could put £21k in to the '3 Lloyds Vantage current accounts' merri-go-round at 4%.

Check out the Savings Account thread.

EalingSaver

locky123 wrote: »

Yes 250K after mortgage is redeemed.

At this stage a 6 month bond is not attractive, what rate would it be?

So looks like 2.8% for easy access savings account and maybe some in Premium bonds as well. There are 4 of us incl 2 children.

So sounds best not to have more than 50K in any single account. Is the risk still really there?

Sounds very similar to the position I was in middle of last year. Just reaching conclusion now with haivng exchanged on a new place earlier this week.

Q: Is the risk still there?
A: In practise its turned out to be 'no risk' because all retail savers have been compensated in every case. But the real answer is: do you want to have sleepless nights or rest easy?

I had got burnt with IceSave and Kaupthing Edge. So I certainly spread my money around. I will always now keep within FSA limits. I'm already twitchy with the thought that I'm temporarily going to have to have a large sum of money with my CA provider for a short time as I move money into one place to pass into the Solicitors account for the new purchase!!

As others say: use the best buys in the savings section to find out. Also if you aren't using your ISA allowances and don't intend to after you move, would be worth considering taking out 2 instant access ISA's providing at good rate, Only squirrels away £10,200, but at least its tax free.

This may sound a bit left field, but you're biggest capital value risk here is of course potential change in house prices in the interim. In hindsight, when I sold up middle of last year I wished I'd investigated possible mechanisms for 'hedging' against house price changes. We probably got caught short, thanks to a vendor who we eventually had to pull from. We were therefore out the market for a year, longer than we expected, and probably resulting in a "loss" of £30-50k (house prices rose while we were out the market).