Very Short Term Savings

6022tivo

Just a quickie

Sale proceeds of a house need to go into a bank account for about a month whilst the one being purchased completes.

Not much decent interest around, unless anyone has any other bright ideas? Recommendations?

Thanks in advance?

alanq

Assuming that proceeds of house sale exceed £85,000 you should spread the funds around different financial groups (< £85,00 in each) or use NS&I which is 100% guaranteed by the government.

For best easy access interest rates see Quick Links near the top of this page.

opinions4u

I'd be tempted to stick it in an easy access account with my bank.

Ease of opening and funding being the reason.

Note the FSCS £85k limit.

Alternatively, set up an AA account now and top it up when the proceeds come in.

ColdIron

How much is involved and how long until you receive it?

6022tivo

ColdIron wrote: »

How much is involved and how long until you receive it?

£200k + Couple of months max unless it all falls through.



I have accounts with

First Direct
Barclays
Lloyds
Santander
NS&I
Coventry
Cheshire

Would be great to use one of these for ease and initial setting up account hassle.

calypso_rhapsody

For two months i'd go NS&I - not the best interest rate but you can keep it all together without worrying about the £85k FSCS limit and, given the costs of a house move, the 'lost' interest is not really that material!

Archi_Bald

As a basic rate tax payer, the max you could make from the best available accounts in 60 days is not more than about £700. But you cannot actually get all the £200K into interest-paying current accounts, even if there were 2 of you and if you could manage to open, and service, all 13 current accounts per person (plus perhaps some savings accounts for DDs that are needed with some accounts) that you could theoretically open and that would be needed for this. The max you can stick away in interest-paying current accounts per person is around £90K.

If you are looking to mortgage your new home in the next couple of months, it would most likely be unwise to start applying for additional current accounts now since they will all require credit checks and all mortgage lenders will apparently take a dim view of too many credit applications. It is also questionable whether you would even be accepted for all the required current accounts in a short period of time.

So I think your only reasonable options are savings accounts. The easiest, NS & I, where you can park all your money in one lump sum, will yield some £290 after BR tax for 60 days (1.1% AER) . If you manage to find 3 others that pay 1.5% AER, you can make something like £390. It can take an eternity to open some of these accounts if you don't already have an account with them - e.g. the AA and SBI take around a month for setting up an account complete with internet access.

Given that moving house can be stressful at best of times, I would just settle for the NS&I option if I were you.

6022tivo

The NS&I stuff I have are Premium Bonds and fixed RPI stuff, it would be a new account.

I did have a look at the FirstD savings that can just be opened along with my current account, but they are paying stupid 0.1% on a savings account (Don't see the point of them offering it!)

Will check out LLoyds and Barclays, but can't imagine anything different.

p.s. House moving is stressful!

ColdIron

6022tivo wrote: »

I have accounts with

First Direct
Barclays
Lloyds
Santander
NS&I
Coventry
Cheshire

Nothing worth having in the top 4 of that list for the amount you require, can't speak for Coventry and Cheshire but you'll struggle to do better than 1.5% for easy access elsewhere. You'll get about £100 extra than NS&I at 1.5% after tax so I'm not sure it's really worth it

If your NS&I account is for Index Linked Savings Certificates and you don't already have online access I'd get a move on as they can be quite slow to set up. Also bear in mind they pay interest gross so you may have to declare it to HMRC

6022tivo

Just noticed that 1.1% GROSS with NS&I.

It will probably trigger a Self Assessment form from the HMRC. Don't think I want to bother or risk that headache?

6022tivo

I can get instant access 1% with Santander up to 100k
1% Lloyds Instant
0.8% Barclays.

Will probably split in the top two. Checking the others now.


Are interest rates this low because the BoE are offering money to these institutions at bargain rates??