£500,000 I want to keep safe - ideas please

CantDecide

I am about to inherit £500,000
I'm not entirely sure what i'm going to do with it in the longer term, but in the short term I want to put it into 'safe savings' where preferably i can get hold of it quickly when i know what i want to do with it.
I know all about the Santander/LLoyds/Tsb current accounts etc, and i don't mind jumping through a few hoops if it helps. I will also max out my ISA and premium bonds.

But has anyone any ideas other than splitting between the highest (least low, shall we say)interest savings accounts (instant access probably, but definately NOT fixed for more than a year)

Is 1.4% REALLY the best i can achieve for the first few accounts I choose?

Opinions, tips, ideas would be useful

Archi_Bald

Put it into NS&I for safety: http://www.nsandi.com/savings. I see you are already on to this from another post of yours.

Then consult with an IFA on what to do longer term. If you want to put some money into current accounts, just spend some time on the forum as the available current accounts have been discussed ad nauseum already.

Linton

A quick look at one of the comparison sites tells me that Birmingham Midshires offer 1.6% for the first year. You will find it difficult to get much more than that with £500K, the special deals are loss leaders intended to capture new customers rather than make a profit for the banks.

Whether you want to put all the money with one provider is up to you - remember that only £85K is protected. BM are part of BoS/lloyds so perhaps not a massive risk.

Archi_Bald

Linton wrote: »

BM are part of BoS/lloyds so perhaps not a massive risk.

My personal opinion only but I think it would be insane to risk a few hundred thousand for a few extra quid in interest, even if the risk is "perhaps not massive".

bowlhead99

Beyond the high interest current accounts and some 'regular saver' accounts which will only account for 10% or so of your £500k, then yes you are looking at a very low percentage.

The premium bonds are, at least, tax free - but only pay on average 1.35%, and that payout rate assumes you actually invest enough for long enough to win the average set of prizes. If you have £40k invested you should win about 1.5 prizes a month, and as there are now a whole TWO £1m prizes out of 1.9 million total prizes, it will only take you 617,000 months to expect to win that top prize and achieve the stated 1.35% total annual return. So, not much more than 50,000 years to wait for it then.

As you probably don't want to have too much with any one bank institution (as there's no industry compensation scheme to cover deposits over £85k with any one bank), the standard advice for a short term solution on a huge amount of cash that avoids using loads of banks, would just be to hold other NS&I products - their Monthly Income Bonds pay 1.26% AER on up to a million.

CantDecide

My whole reason for needing tips is that i WILL be splitting the money into different accounts so it is all safe - i'm not prepared to risk any of it!!

I hadn't seen the Birmingham Midshires one though - is it for ANYONE? I will look.

My plan is to spread across the very few banks/BS's which offer more than 1.25% then put the rest into NS&I.

But as I say, any other tips are more than welcome

Archi_Bald

http://www.moneysupermarket.com/savings/

http://www.money.co.uk/savings-accounts.htm

etc etc

CantDecide

DOH - didn't click...BM = Birmingham Midshires

DiggerUK

Hi Can't Decide, a bitter sweet reason for you posting here. Most of the short term suggestions are good, especially NS&I.

Once you have decided on short term, then there is the question of long term. If you are looking at 5 years plus then it is time you included research on gold.

Here is a price history for the last 36 years.

These are a collection of articles from Moneyweek. Exercise due diligence, they speak favourably on gold, and I'm also a huge fan long term. Please post any questions.
..._

ColdIron

Personally I would have more faith in an old woman reading tea leaves than MoneyWeek

Linton

DiggerUK wrote: »

Hi Can't Decide, a bitter sweet reason for you posting here. Most of the short term suggestions are good, especially NS&I.

Once you have decided on short term, then there is the question of long term. If you are looking at 5 years plus then it is time you included research on gold.

Here is a price history for the last 36 years.

These are a collection of articles from Moneyweek. Exercise due diligence, they speak favourably on gold, and I'm also a huge fan long term. Please post any questions.
..._

If you had bought in 1980 you would only be back in profit 25 or so years later. Perhaps 25 years isnt long term enough?