Seeking advice on investing £10,000 and making regular withdrawals

scottishpasty

Hi
As a result of a selling my house, I will have £10,000 to put into an account somewhere.

This money is being taken from the profit of the house sale to offset against maintenance payments for my son, currently £140 pcm. I will be needing to pay for the next 6 years.

My plan (and I don't know if it's a good one or not) is to pay the £10k into an account with as high an interest as possible, that doesn't charge me for making regular monthly withdrawals. I know I will be taxed on the interest but hey ho there you go.

This would mean that I free up £140 from my salary, and also pay the maintenance due, the £10k would make some money in interest which in turn would assist in paying a a proporation of the maintenance for me. Which in turn would make the £10k last longer.

Does this make sense ?

If it does can anyone help in suggesting an account/plan which would allow me to do this?

Cheers

Scottishpasty

EdInvestor

If you have not used this year's cash ISA and get your skates on, you could have 6k out of the 10k protected from tax over the next two weeks, one using this year's allowance and the other next year's.

dancingfairy

I would put £3000 into a cash ISA for this tax year as Ed says - you need to be quick, £3000 in a cash ISA for next year and then put the rest in a high interest earning account with easy access.

scottishpasty

Thanks Guys
I've not really been much of a saver all my life.
With Cash ISA can you make withdrawals without charge, What are the rules with how long you need to keep the money there without penaly for withdrawing, etc?
As when the £4 k runs out I will need to withdraw from the cash ISA, I know that won't be for a couple of years but like I say I'm a newbie to savings.
Sorry if I sound stupid.

tyllwyd

The easiest way to think about a cash isa is that it is basically the same as a savings account, but with a limit of £3000 that you can put into it in any tax year and you don't pay any tax on the interest earned. So you need to have a look around, find one you like the look of, and then check the terms and conditions for that account to see if there are any penalties for withdrawals etc. It will depend on the product that you chose.