How to handle a large sum of money?

bell

A relative of mine just inherited £125,000 and has asked my advice on what type of bank account they should be looking to open and who are the best.

She will probably be looking to deposit approximately £80,000 after using the rest for a house purchase gifts etc.

She intends only to spend the interest that this money accrues and but wouldnt want an account that requires long notification periods.

What kind of options and interest rates are open to her.

HSBC (her current bank) has converted her account to one that yields about 3% currently until she meets their financial advisor.

Any ideas?

KTF

She should cancel the appointment with the banks advisor and go to an independent one instead. That way she will get offered a wider range of products as the HSBC one will only push HSBC products.

As a starter I would max out the ISA allowance (assuming she is a tax payer), then look at regular savers and high interest instant access accounts.

However, if I had that sort of money I would go to an IFA rather than stick it in an instant access account as there is a lot more you could do with it.

jonesMUFCforever

It all depends on your friend's attitude to risk and reward.
More risk - potentially bigger returns but with a possible loss of capital or no risk by putting it in accounts where after inflation you will lose out in long term (10 years +).
Possible a mix would be best here - some high interest accounts with some invested in the stock market for the long term.