Sold house, going into rented,what to do with 140K

Coal_Shoveller

Hi Everyone

Just joined the forum and this is my first post, I am in the process of selling my house, but have'nt yet found a house to buy, so it looks like rented for me and the family. However as someone who has never had savings before, I will find myself with about 140K to invest until I find a house, so where is the best place to put the money for a short term investment, say 6 months, looking on the website it seems you get the best rates from current accounts, but I woukd need a lot of them to take 140K, so suggestions please.

J.P.

Mallotum_X

What are house prices doing in your area? As much of the country is seeing prices running at 10% inflation and up, you will need to factor this into your plans if you are going to rent for 6 months before buying.

Coal_Shoveller

Luckily in my area house prices are currently static, however that is somthing that really bothers me, once I have paid for rent and storage I will be able to save about £200 a month + whatever interest I can get on my deposit, as I said ok at the moment but if prices start to rise, but as there is currently nothing for sale in the village I live that is suitable what choice do I have?

J.P.

Cyberman60

No 1 rule is don't have it all in one account, as only 85K is guaranteed in any one bank(including subsidiaries).

xylophone

Well, for the simplest option you can put the lot into NS&I Income bonds but the interest rate is very modest.

Otherwise, I sole TSB for you and spouse and one joint. (£6000).

One sole Nationwide Flexdirect for you and spouse and one joint. (£7500)

I sole LLoyds Club for you and spouse and one joint (£15000).

I Santander sole for you and spouse and one joint, (£60,000)

3 BOS sole for each and one joint (£35000).

2 Tesco sole accounts each and one joint £15,000).....

Cycle round minimum monthly payments and comply with any DD requirements....

JosieSquibs

This is my first post, and I too am in a similar position to you but with half the amount.
I pick up the keys to a rental property tomorrow as the house we had gone for to buy was taken off the market. The rental is £200 more per month than my old mortgage was so saving anything significant after paying bills is going to be a struggle.
I already have a Santander 1 2 3 account, so wonder whether it should all just go in there (I'll be just under the £85k guaranteed), so I can get decent interest, and it's instant access for when the right thing comes along ….. ?
Any suggestions would be greatly welcomed!

:undecided

bowlhead99

JosieSquibs wrote: »

I already have a Santander 1 2 3 account, so wonder whether it should all just go in there (I'll be just under the £85k guaranteed), so I can get decent interest, and it's instant access for when the right thing comes along ….. ?
Any suggestions would be greatly welcomed!

:undecided

You'll only get 'decent interest' on the maximum amount Santander pay interest on. That's a good 3% on the first £20000 but nothing on the £20001 to £80000. If you don't also have an 'other half' to open up another account at Santander (and a joint account with you, for 3 accounts in total) then you are wasting a decent amount of potential interest. You could get 1% from a 123 esaver account on the last £60,000 but that's low compared to what you'd find elsewhere.

So the solution would be to open up a bunch of extra accounts with other banks as suggested in xylophone's post above (you don't need spare money each month to fund all the 'minimum monthly deposits', because you can just keep cycling small parts of the £80k all around them).

If this is just a very short term thing rather than for a year or more then you don't need to shop around for the absolute best rate - the NSANDI monthly bonds give you access pretty much as quickly as needed for a house purchase. It's just a bit of a waste having it all in one account if that account doesn't pay interest on a big chunk of your money. After all, 3% on £80,000 is £2400 a year, which is £200 a month before tax, which is the number you're now spending in extra costs while renting, so not something to ignore.

JosieSquibs

bowlhead99 wrote: »

You'll only get 'decent interest' on the maximum amount Santander pay interest on. That's a good 3% on the first £20000 but nothing on the £20001 to £80000. If you don't also have an 'other half' to open up another account at Santander (and a joint account with you, for 3 accounts in total) then you are wasting a decent amount of potential interest. You could get 1% from a 123 esaver account on the last £60,000 but that's low compared to what you'd find elsewhere.

Thanks for that, I had no idea the interest was capped (probably as I've never had that much in there before!)

Really appreciate your help, best get opening some new accounts!

Cheers

Coal_Shoveller

Thanks xylophone, looks a bit of a hassle, but I guess you have to put the effort in if you want the rewards.

I will follow up with how I get on.

J.P.