Inheritance and savings plans

rca779

So I am in a very fortunate position of just inheriting a large cash sum following the sale of my parents house.

So I am looking for some advice with regards to savings.

My rough plan is to put approximately £80k into a three year savings plan of some form - a fixed rate bond maybe?

I want to put £20k into an account where I can make regular £500/month mortgage over-payments. I am in a fixed rate mortgage for the next 3 years so I can only over pay at present.

The £80k bond will then be used to pay off a great chunk of the mortgage once the fixed rate has finished.

I was then thinking of £15k in a cash ISA, but the rates are so rubbish that I am thinking there must be a better option.

I have been looking at the TSB & Lloyds current accounts that pay 4-5%, but you need regular payments in. Does the payment in have to come from my employer? Could I just set-up a regular payment from my other savings account?

Any advice would be greatly appreciated.

uknick

rca779 wrote: »

.....

I have been looking at the TSB & Lloyds current accounts that pay 4-5%, but you need regular payments in. Does the payment in have to come from my employer? Could I just set-up a regular payment from my other savings account?....

It does not have to come from your employer. I recycle the money around various accounts using a standing order.

rca779

uknick wrote: »

It does not have to come from your employer. I recycle the money around various accounts using a standing order.

Excellent, so I just keep the accounts topped up to their maximum by transferring money from a savings account and I can qualify for the 4-5% interest.

redux

rca779 wrote: »

Excellent, so I just keep the accounts topped up to their maximum by transferring money from a savings account and I can qualify for the 4-5% interest.

If for instance there's a requirement for a few hundred quid a month coming in, people are setting up standing orders for that amount in, then out again.

Likewise, some accounts require a couple of outgoing direct debits per month (as if to prove it's being used for regular expenditure). So make sure that's covered as well.

jimjames

If you don't have any investments or pension isn't maximised it might be worth looking at those for a portion of the money.

Cash ISA rates may be rubbish but plenty of good options for S&S ISAs if you are prepared to look longer term.