240,000 invested for income

MichaelCollins

Hello everyone, wondering if anyone could give me some advice. I've inherited some money recently upon the death of some close relatives and with my savings already I've got about 240,000. I want to do a PGCE so if possible I'd like it to give me enough income for a year while I do that. Would that be feasible? How much could I expect to get in interest on that amount while retaining almost instant access if possible?

opinions4u

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

Tesco paying 1.55% gross.

Assuming no tax to pay £310 a month will accrue in interest.

What are your longer term plans for the money?

torbrex

Even with a low interest rate, you could take £1000/month of an income from the lump for the next 20 years.

MichaelCollins

Thanks for your reply opinions4u. Would a standard savings account be the best option even if I didn't require instant access to the cash but only the interest? Could I get a better rate of return anywhere if I locked it up for 6 months and then had access to it? In the longer term I think I'll be looking at moving to a bigger place so I don't know how much I'll have left at that point.

Thanks again.

Michael

MichaelCollins

torbrex wrote: »

Even with a low interest rate, you could take £1000/month of an income from the lump for the next 20 years.

Thanks for the reply Torbrex. That sounds good. How exactly would I do that?

torbrex

MichaelCollins wrote: »

Thanks for the reply Torbrex. That sounds good. How exactly would I do that?

Deposit the money into a savings account that allows standing orders and get the money transferred to a current account that gives rewards for a monthly deposit of £1000 such as Santander and you could transfer any unused money into a regular savings account to get a good rate of interest from them.
Only 3 accounts required and you would get interest/rewards from all 3.

MichaelCollins

torbrex wrote: »

Deposit the money into a savings account that allows standing orders and get the money transferred to a current account that gives rewards for a monthly deposit of £1000 such as Santander and you could transfer any unused money into a regular savings account to get a good rate of interest from them.
Only 3 accounts required and you would get interest/rewards from all 3.

Thanks for that, I'll look into it. Could you clarify what you mean by "unused money" though, and the difference between the two savings accounts?

Thanks,

M

opinions4u

MichaelCollins wrote: »

Thanks for your reply opinions4u. Would a standard savings account be the best option even if I didn't require instant access to the cash but only the interest?

No. But your original post said you wanted access.

MichaelCollins

opinions4u wrote: »

No. But your original post said you wanted access.

Sorry, I'm not too concerned about access to the capital, just the interest so I can get an income. The capital could be tied up for a year or two or maybe longer. Is that possible though, to retain access to the interest but tie the capital up?

atush

at 1000 a month you will be eating into capital at todays rates, and you are also failing to factor in the loss due to inflation (ie the 240K won't have the same spending power next year, the year after etc).


You need to think about exactly When you need this money (or part of this money) and if any is 5-10 years away or more, you can get a higher income now by investing that tranche of the money. Keeping the rest in cash. you can keep a certain amt easy access, then a phased set of longer term deposits so that you always have access to some of it.

Then of course you have options for the much longer term such as a pension. Starting one now, if you have access to capital to do so, could be a wise move.

torbrex

MichaelCollins wrote: »

Thanks for that, I'll look into it. Could you clarify what you mean by "unused money" though, and the difference between the two savings accounts?

Thanks,

M

Unused money = Money left over from the sum that was transferred from the lump to the current account, if you transfer £1000 but only actually spend £800 then transfer the remaining £200 to a regular saving account which pays slightly higher interest if you deposit every month.
See the thread about Regular Savings accounts, the first few posts have all the up to date info.