What's the best thing to do with £260k for 1 month?

Jon_Nichols

Having just exchanged on the sale of our investment flat in London, we (my wife & I as joint owners) are due to complete on July 15th, and once we've paid off our mortgage, we'll have just over £260,000 in our bank account for about a month, hopefully not much longer, depending on how quickly we can complete on the purchase of our new home in Poole.

I know we're not going to make much in a month, but it seems a waste to have it sat in my 0% current account, especially as our purchase COULD end up getting dragged out, as is often the case, and any interest that can be made, would always be useful!

Can anyone recommend an easy high-interest option please? Ideally not requiring me to divide it up into lots of £20k chunks?

Cheers!

Jon

Daniel54

Jon_Nichols wrote: »

ful!

Can anyone recommend an easy high-interest option please? Ideally not requiring me to divide it up into lots of £20k chunks?

There is no easy high interest option

Keep it safe at NS&I where it is fully protected

http://www.nsandi.com/direct-saver

steelbru

I'm going to be in a similar position to the OP, and have been looking at the NS&I Direct Saver, and the NS&I Income Bond

Direct Saver is 1.1% AER, Income Bond 1.25% AER
Both have interest calculated daily, no notice for withdrawals, no penalties.

The Bond pays the interest monthly to a nominated bank account, the Saver pays interest annually added to the Saver account.

So, if only planning on saving for a few weeks, would the Income Bond be better due to the higher interest, or are there any downsides ?

Jon_Nichols

My current thinking is that I'll probably put the max amount, which I think is £40k each, both for me and my wife into Premium Bonds, then maybe put a couple of £20ks into 3/4% current accounts, and put the rest into NS&I for safekeeping. A bit of admin, but worth it I think, especially if we got lucky with Ernie!

TheTracker

steelbru wrote: »

I'm going to be in a similar position to the OP, and have been looking at the NS&I Direct Saver, and the NS&I Income Bond

Direct Saver is 1.1% AER, Income Bond 1.25% AER
Both have interest calculated daily, no notice for withdrawals, no penalties.

The Bond pays the interest monthly to a nominated bank account, the Saver pays interest annually added to the Saver account.

So, if only planning on saving for a few weeks, would the Income Bond be better due to the higher interest, or are there any downsides ?

£260000 * (1.25-1.1)/100 / 12 months - 20% tax = £26 a month difference.

AndyT678

If you're holding the premium bonds for "about a month" (post 1) then you have a high probability of winning £0 since you need to hold bonds for at least a full month before they are even entered into a draw.

Jon_Nichols

That's a very good point AndyT678! So probably not worth bothering then. Surely there's somewhere I can put it to get more than 1.1/25%?!

steelbru

Jon_Nichols wrote: »

Surely there's somewhere I can put it to get more than 1.1/25%?!

Don't think there is if you want full protection and can't be bothered splitting it into £85k chunks

Jon_Nichols

If there's no easy place to put it as a single lump to get more than 1.1/25%, I would be willing to split it up a bit, but don't want to have to open 10 new accounts. I can handle a bit of admin, especially if it's worth several hundred pounds, but was hoping to find a more lucrative single option - as it's not sounding like there is one, it looks like that's going to be my best option.

You mention specifically '£85k chunks', is there a particular reason, or is that to do with the amount that the FSCS will cover?

Thanks

eskbanker

Jon_Nichols wrote: »

You mention specifically '£85k chunks', is there a particular reason, or is that to do with the amount that the FSCS will cover?

Yes, it's the limit of FSCS protection, see http://www.fscs.org.uk/what-we-cover/eligibility-rules/compensation-limits/deposit-limits/

kidmugsy

Jon_Nichols wrote: »

Surely there's somewhere I can put it to get more than 1.1/25%?!

You are, to use a technical term, away with the fairies. Interest rates are low. You are talking about one month. Phooey - it's not worth an hour of your time. Bung it into ns&i.