Short term deposit of £10k

JuC

Apologies if this is the wrong thread, wasn't sure where it would fit best....

I have been given a cheque for £10k which was a complete surprise so I don't know exactly what to do with it yet although it is likely I will be spending most or quite a bit of it within 2 - 6 months.

I have a Lloyds Vantage account (with @£6k) and premium bonds. Someone has mentioned that I will be taxed if I put it in my bank account but don't know if this is true or by how much.

My gut feeling is to pay into the bank account and when cleared transfer it to my Premium Bonds. When I want it I can then transfer it back to my bank account.

But is this the best way? Any advice appreciated....
Thanks

HappyMJ

Premium bonds are rubbish especially in the short term.

You would be better off putting some of it in an ISA and the rest in a savings account.

Yes you will be taxed at your marginal rate usually 20% but the return you get after the tax you pay will exceed the average winnings you get gambling it on a premium bond.

JuC

HappyMJ wrote: »

Premium bonds are rubbish especially in the short term.

You would be better off putting some of it in an ISA and the rest in a savings account.

Yes you will be taxed at your marginal rate usually 20% but the return you get after the tax you pay will exceed the average winnings you get gambling it on a premium bond.

Thanks for the advice. If I put some in an ISA would I get any interest if it was only in there for a fairly short period of time? I don't currently have an ISA.

evenasus

An ISA would receive 'what ever % ' each day - normally paid out once a year - or until the ISA is closed/transferred.

So, £3000 in an ISA at 2.5% interest per year - left in for 7 days would accrue £1.44 if the account was closed after 7 days.