£40k - where shall I put it?!

sjcave74

I am in the process of a house sale and relocating into a rented house and upon completion next week I will be banking £58k. I am buying a car and have to pay off a couple of things and buy stuff for my new house but will end up with about £40k which I want to save for when I want to buy a house again in the future.

I don't have the first clue about what to do with it or where to put it!

Anyone have any advice??

Thank you!

saintalan

Hi

First thoughts would depend on how long before you step back in to property?

For Easy Access just get as much interest as possible, probably worth getting an ISA and as it stands Santander 123 current a/c (x 2) pays 3% for the rest.

Cheers

Alan

sjcave74

Thanks for that, yes I already have a 123 account with them, which I use for direct debits etc so I didn't really want to put it in my current account where I'll have instant access to it. I will probably not be in a position to buy property for another couple of years but I don't want to have absolutely no access to it just in case. Thanks for your reply

Rafter

sjcave,

Depends on your attitude to risk and how long you think it will be before you buy a house.

Articles under the 'Banking Savings' tab above will give you current best buys for ISAs, Easy Access and longer term savings bonds.

However, apart from a few regular savings accounts it is unlikely you will earn more than about 2.5% interest which means that with inflation at c.3% the value of your savings is actually going backwards.

The only way to avoid this is to take some risk with your money investing in a stocks and shares ISA, or investing in other types of investment BUT your money will be at risk.

The advantage of a 'savings account' is that as long as the balance is less than £85k (with one bank or building society) your savings are protected by the governments FSCS scheme so you will get 100% of your money back.

Investing in stocks and shares (or other investments) you are not guaranteed to get your money back..... which is why over time you generally earn a greater return on your money.

Good luck

R.

Onawingandaprayer

Can't believe I'm saying this, as I've been so anti in the last few years, but with interest rates so crap, why not shove £30k of it in Premium Bonds?

There, I've said it. Wash my mouth out.

sjcave74

Thank you! I had considered premium bonds...don't really know a lot about them - can you take them back when you want? I understand about the inflation issue and that in effect the savings will go backwards but I'm not sure I want to risk losing any money either. It's for my future and I'm not ever getting money like this ever again.

Onawingandaprayer

1. Check the Premium Bond calculator on this site. http://www.moneysavingexpert.com/savings/premium-bonds-calculator/
With average luck it suggests £30k (the max you can put in) might win £400 pa. Less than you'd get in the best paying ISA, but you can only put £5,760 pa in there.

2. You have to wait a calendar month till your bonds appear in the draw.

3. You can get your hands on your money just about instantly ie, within a few days.

4. it's all tax-free, including your million pound prize. :rotfl: But you never know...

Sue27_2

I used to have an Investec High 5 account (think it is now called something like Hight 5 issue 2) might be worth checking out. It's six month's notice but tracks the top 5 high street savings accounts and so the rate pegs to other banks rates. I think it's around 2.2% interest but it's safe and does move with the market. The notice period might be a problem though....

sjcave74

Thanks everyone, you've been really helpful. It's given me a starting point to research my options. Thank you!

donniej

You didn't mention when you might want to access the money again - depending on that, there are a couple of other things you could look into:

- fixed term bonds: they usually give better rates, but you lock your money in them for a while (usually 1-5 years.)
- investing: you usually wouldn't consider that with a time horizon lower than 5 years (10 is better.) Collectives (funds, ETFs, investment trusts) are a good place to start (as opposed to investing in stocks/shares directly, which are more difficult to get right.)
- forex/bitcoin/spread betting: just joking. These are all risky and not usually a good idea.

sparkyspark

First Direct's Cash ISA which pays 3.00% AER (2.96% tax-free) variable on balances of £40,000 and over http://www1.firstdirect.com/1/2/savings/cash-isa?WT.ac=FDST_LHM_SAV_CISA1001
There are No bonus payments on this account so it's a straight rate for the term of the isa, although to open a Cash ISA you will also need to open a First Direct 1st Current Account http://www1.firstdirect.com/1/2/banking/current-account