Where to put 220k for one year?

davilown

Hi

A relativehas just sold their house, but due to being self-employed they can't get a mortgage for at least a year until his credit record improves (results of a very lean, wet and white winter - outside contracts).

They have put 20k away from the sale of their current property to cover rent for 12 months but have another 220K equity. (sold for 495k, paid off current interest only mortgage)

Where would be the best place to put this for one year without risk?

Any advice would be greatfully appreciated

gozomark

will they definitely not want the money for 12 months ?

Procrastinator333

If it were me:

£15k per person in to NSI RPI bonds. Yes they are a 5 year product, but leave it in 12 months and you get back RPI + 0.25%. If there are 2 of them, that is £30k locked in to whatever RPI does.

After that, just spread it around different banks, keeping each under the £85k limit and look for the best 1 yr fixed bonds or savings accounts.

Not a lot else you can do with it really.

The parts they do need access to could go in the NR easy access, pays 3% and instant access.

davilown

gozomark wrote: »

will they definitely not want the money for 12 months ?

Yep signing rental property for 15 months

Procrastinator333

They should also consider their tax position. As NR pays 3%, they should not be getting any less than that. So they should get a min of £6,600. You don't want to pay any more tax than you have to.

Make sure it is in the name of the person with the lowest marginal rate of tax.

Ifts

FirstSave offer a 1 year savings bond that pays 3.5% gross:

http://www.firstsave.co.uk/

(The bank is a member of the FSCS, which gives 100% protection for the first £85K of a depositor's total deposits. Customers with joint accounts will be eligible to claim up to £170K)

Ifts

I agree with Procrastinator333:

£15k per person in to NSI RPI bonds. Yes they are a 5 year product, but leave it in 12 months and you get back RPI + 0.25%. If there are 2 of them, that is £30k locked in to whatever RPI does.

If there is 2 of them and they do NSI RPI bonds, then they will only need to find a home for the remaining £190K.

And if your relative does choose to go for a 1 year savings bond and they want to spread the money between a few different providers:

http://moneyfacts.co.uk/compare/savings/fixed-rate/short-term-bonds/

There are several 1 year bonds on that best buy table that are currently paying between 3.35% and 3.51%.

Mr_K

Procrastinator333 wrote: »

The parts they do need access to could go in the NR easy access, pays 3% and instant access.

Not any more it doesn't. The NR 3% was has been withdrawn for new customers.