Best lump sum savings account?

money13

Hi everyone,

Me and my husband will be getting a large sum of money in a couple of months time and we are currently looking at savings accounts to put just over £50,000 in and getting very confused!

Firstly we will be making full use of our cash ISA amounts so that's £11,520 taken care of, leaving us with about £40,000 to put somewhere!

Could any of you recommend a good savings account for this sum of money? Any advice would be appreciated

typistretired

As long as you don't exceed £85,000 for individual savings or £170,000 for joint savings account, it is just a matter of finding a savings account which is convenient for you both to operate and with a bit of luck also provides a good interest rate. Look at the best savings accounts provided at the beginning of this forum which is always kept up-to-date and choose one that is best for you. Also KAZZA242 keeps the best isa list up-to-date.

psychic_teabag

If you plan to use instant-access ISAs, it might be worth opening with the minimum now, to bag the rate. Rates may well have fallen in a couple of months. If you want fixed-term ISA, I guess you'll just have to take your chances.

Actually, I guess there's similarly a case for grabbing any good non-ISA savings accounts between now and getting the money, rather than waiting. Easy enough to close an account if a better one comes along. And of course if the account is open ahead of time, it will be ready to receive the money.

Oh - and don't forget to look at current accounts - some are currently paying more than savings accounts. Eg Santander 123, Lloyds and BOS vantage, all paying 3% on various ranges of balance (so you'd have to distribute the money across several). There are funding requirements, etc.

Primrose

If you want to keep this money as long term savings, you might be sensible to maximise the use of your cash ISA allowances every year and stagger your investment over fixed term savings bonds for one, two and three years. . This will mean perhaps putting c £11,500 in a one year bond (so that it's available to invest in a cash ISA for the next tax year) , an equivalent amount in a two year bond so that that this tranche will be available in two years for the subsequent cash ISA year , and the last tranche in a three year bond, so that you have money maturing to take advantage of each tax year. Of course you may have spent it all by then, or not want to tie the money up that long, but if you do, it makes sense to try and obtain slightly better interest rates for longer investment periods while you're gradually planning to move the entire sum into tax free savings vehicles.

money13

Thank you all for your help.
I will just have a look through the savings thread at the top of this forum now.
We know we want 2 ISA's and we were thinking it might be best to open some now to get the good rates and as you say, it'll be good that they are all ready to go when the money comes. And there's no harm in opening any of the high interest currents accounts either, just have to choose which ones.
Most of them require money going in each month, so I guess it would be ok to just have direct debits jumping between the current accounts? Think I read this is ok somewhere?
I don't know anything about bonds but they sound interesting. We have no plans in the short term for the money so this would definitely be an option. Longer term we would like it all to be in ISA's if they are offering the best no risk return.
Having looked around on here a little bit I can see this isn't a huge amount to find a home for compared to some of you.
Thanks again for your all your help x

Primrose

Bonds are effectively fixed term savings accounts with building societies or banks, rather than instant access accounts, where you agree to tie your money up for a fixed length of time, ie one year, two years, three years, etc. for an agreed rate of interest for the duration. Just remember that it's a condition of most of these bonds that you can't withdraw your money until the end of the fixed term so be sure that you won't need access to it during the agreed period.

typistretired

Just received my maturity letter for a bond I had with Coventry Building Society. They say they are pleased to offer me our highly competitive Poppy Bond (14) to 30.09.2014 at 2.10%. If that is all that is being offered for fixed 17 months' bond I think I will stick to easy access accounts.