Need banking advice

r8frazer

Hi there..

I need some advice about where to put a large sum of money.. I will soon be selling my house and will have £180,000+ cash which will need to be banked! I'll be renting for a while after this (approx 9 months).

What would be the best banking option for the cash following the sale? I will need to withdraw the entire amount in one go when my new house is ready (new build).

Also, Im looking to set up a new current account. Reading on here it seems that A&L is the best option...? Monthly funds going into the bank, approx £700. Always in credit.. basically looking for a good interest rate. Internet banking would be easiest so not desperate for great till service. What debit card comes with the A&L account?

Thanks, Angela

munki_3

Hi Angela,

Not an expert on A+L as bank with FD but just to let you know of the E-savings account.
Most banks offer them so once you have set up your current account I would recommend one.

Once you have transfered the money into your E-savings account interest is calculated on a daily basis and paid monthly (this is subject to their being no withdrawals for that month)
Interest rates are usually quite good. Mine is 4.75 AER (4.65 Gross) which is quite good especially when your hoping to have £180k saved in the a/c.

Hope this helps and good luck with the house move.

Gordon_the_Moron

A&L offer the best current account, but only pay interest (worth bothering with) up to £2500 (0.1% after) and the E-saver isn't as good as others.

A decent cash ISA will protect the first £3000 from tax, after that ICICI is the best, but for speed withdrawing and ease of use go for a slightly lower rate with an account connected to current account (Nationwide would be my first instinct but do a search)

MPH80

Mine is 4.75 AER (4.65 Gross) which is quite good especially when your hoping to have £180k saved in the a/c.

But has a BIG problem with it - especially when holding £180k. The month you make your withdrawl will result in NO interest being paid in that month.

Which means if you happen to exchange on the 30th of a month - you could lose 30 days interest on £180k!

A&L's C/A is ok - but the problem is you're only going to get 5% on the first £2.5k.

I'd actually look at Cahoot if you want a C/A - 3.75% on up to £250k.

M.

Gordon_the_Moron

You get better than that with Coventry Building Society, but I'd consider a savings account. The first £3k should be in an ISA, unless they paid about to get 5.1% net you'd need a taxable account to pay 8.6% gross if you were a higher rate tax payer.

MPH80

Gordon_The_Moron wrote:

You get better than that with Coventry Building Society

There's a good reason I didn't mention that:

r8frazer wrote:

Monthly funds going into the bank, approx £700

From the Coventry Website:

*To earn the advertised rate of interest including the bonus and guarantee you need to deposit at least £1,000 each month

But yes - I agree a savings account is the best option - but that needs to be linked to a C/A without delays on withdrawls. Which means the ISA (if you really believe earning the extra on £3k is worth it for 9 months - we're talking about £22 here!) and the savings account need to be linked with a current account and that there are no internal transfer limits as there are with some organisations.

However, the OP DID ask about Current Accounts. Given the others will requirea monthly funding higher than the level the OP can supply and that Nationwide and A&L's accounts are only on a certain level - Cahoot would probably be the best option for what the OP asked about.

M.

cheerfulcat

r8frazer wrote:

What would be the best banking option for the cash following the sale? I will need to withdraw the entire amount in one go when my new house is ready (new build).

Hi, Angela,
On the assumption that the current account issue is separate from the lump sum problem, I would suggest that the best home for the house money is a money market account with your existing bank or building society. This is a fixed term account where the term can be very short, the rate is fixed for the term and the account may be rolled over indefinitely. The advantages of a money market account are that the money is available at very short notice ( not always the case with large amounts ), and that the interest from any sums larger than £50,000 is paid gross.

Gordon_the_Moron

MPH80 wrote:

There's a good reason I didn't mention that:



From the Coventry Website:

Put £2700 in an outside savings account and set up a standing order to put £300 per month into the savings accounts, that combined with the £700 always paid in would make £1000, you'd have a bit of interest in the savings account afterwards as well.

Maybe the ISA would only make a small gain in the 9 months but I don't like the idea of wasting my cash in tax, I don't know about others?