Short Term Savings Advice

cel469

Hi,

We currently have a mortgage with Nationwide and are looking to take out a new mortgage with the same provider to pay for an extension to our house.

The project will take around 4 months to complete and we will be paying the builders in installments.

We are therefore looking for a short term account with instant access where we can store the money and hopefully gain a little interest too.

Are there any suggestions as to what type of account or product would best suit us.

Many thanks

Cel

dale_cotterill

What kind of amount are we talking about?

cel469

Hi, thanks for the response.

We are looking at around £110k.

Best regards cel

dale_cotterill

I'd expect some to suggest that you use the high interest current accounts and then close them afterwards so you don't have the continue funding them monthly.

It's probably not even worth your time and effort to do that over 4 months, even with the highest rate. There are really no products with offer such a 'solution'.

I'd probably just get the money, move some of it so you don't have more than 85k with one institution, and focus on your home improvement. You'll probably have more on your mind than the minimal amount you could potentially earn in interest.

Consumerist

Or you might want to consider the <National Savings Direct Saver> paying 1.1% gross and 100% protected up to £2M per person.

Even if you go to all the bother of spreading it around different accounts, I doubt you'll improve much on the 1.1% gross overall. This account keeps it all safely under one roof.

Note: this account pays interest gross so you will have to arrange to pay any tax due on the interest to HMRC.