Where to park £60k safely for 12 months?

fearby

As per title. In rented for a year and want to keep the deposit on our next place safe for a year and making some money too. Is it better to split it and put it in different accounts such is the threat of bank meltdown?
Have to be able to access it if we see a place we like I suppose it goes without saying but 12 months is what we have signed up for in rented accom.

BobQ

I suggest putting it into a firm that is protected under the FSCS that you do not have other assets in based on the best rates guide, like the Coventry's latest instant access account.

If the situation is so bad that the FSCS fails it will not matter how many institutions you spread it across.

oldvicar

BobQ wrote: »

If the situation is so bad that the FSCS fails it will not matter how many institutions you spread it across.

Unless of course you have put it with the institution(s) which doesn't fail, which will matter a great deal and is probably something to aim for.

Seriously, it is to be hoped that the FSCS is allowed to fail long before the last bank standing switches off the lights. Paying for a few big failures will put such a strain on those left that they will all topple like dominoes, unless the FSCS itself is allowed to fail. Of course it won't get to this stage because the bulk of the banking system will be nationalised before it gets so critical. Probably.

The mention of exactly £60K and OP's reference to 'we' of course suggests that 2 people could 'safely' put £30K each into Premium Bonds. Dreadful return (or a jackpot) so probably not what I would choose, but very safe and accessible.

Margey

Hi,

I would say that if you are looking to keep your money safe and have access to it then maybe a cash ISA is the way to go. The stocks and shares ISA may offer the potential for bigger gains but there is a lot of risk involved with this and since you are investing for around 12 months if the markets perform badly and your investment nose dives you will not have the time to recover your losses. So in terms of safety and with a decent enough accrual rate (obviously suppressed because of the current economy) the cash ISA is to be considered.

I have attached two links here and here that will allow you to compare cash ISAs

I hope this has helped

Margey

jamesd

fearby, a few accounts just so you have less worry during the up to a week it'd take to get your money back if one does fail. It's very unlikely to happen, though.

oldvicar wrote: »

Paying for a few big failures will put such a strain on those left that they will all topple like dominoes, unless the FSCS itself is allowed to fail.

You mean you think that there might be a failure bigger than RBS and Lloyds, both of which already happened, but without FSCS involvement because they were partly nationalised?

The banks do not have to pay for an FSCS rescue immediately so there is no possibility of the FSCS bill for one failure causing a chain reaction of rapid failures in others. The FSCS borrows the money from the Treasury if it needs more than it has. That loan is then repaid over many years by an increased but much lower levy on the firms. This has already happened in at least one case.

epitome

I woud say the Post Office online saver unlimited withdrawals and pay ins
3.17%

oldvicar

jamesd wrote: »

fearby, a few accounts just so you have less worry during the up to a week it'd take to get your money back if one does fail. It's very unlikely to happen, though.

You mean you think that there might be a failure bigger than RBS and Lloyds, both of which already happened, but without FSCS involvement because they were partly nationalised?

The banks do not have to pay for an FSCS rescue immediately so there is no possibility of the FSCS bill for one failure causing a chain reaction of rapid failures in others. The FSCS borrows the money from the Treasury if it needs more than it has. That loan is then repaid over many years by an increased but much lower levy on the firms. This has already happened in at least one case.

In other words the FSCS is irrelevant for anything but the minnows of the banking world. Protection really boils down to the political will to use taxpayers money to bail out or nationalise any of the bigger banks which get into trouble.

The FSCS is only currently limited to raising £4 billion p.a. from members, but this can be raised if the government really wanted the other banks to pay bailouts back to the Treasury/BoE.