Advice on what best to do with my inheritance: savings

krazyk

I should receive my inheritance early next year of about £55-65k and looking for advice.

I'm happy to lock the money away but would also like to add money monthly too. Most accounts you lock your money away don't allow transactions in either direction so this doesn't seem to be an open option.

I see a Satander 123 bank account that gives you reasonable interest up to £20k (I can use this to pay for my Virgin Media and Mobile bills and earn cashback) but it doesn't appear you earn anything extra for anything about £20k. One issue is it needs a credit check. With my credit rating of 'fair' I'm worried I might get rejected. I currently have a standard Nationwide account and I see they have a FlexDirect account that pays 5% for 1 year but only up to £2k. Again, needs a credit check.

Help to Buy ISAs seem to be a no brainer, for every £200 the government gives you £50. If my maths is correct that 25% interest tax free. Where do I sign up? :-) The details I've read, however, state the max. bonus is £3,000. Is this for each tax year or £3,000 full-stop? If the latter then there is no need to put more than £12,000 into the ISA. I also read that you can only put £200 in per month so to get up to £12,000 will take 5 years (or 4 if you put £1k in at the start)! One last issue, as I'm inheriting a house (but selling it) does that mean I'm not a first-time buyer, even though I've not bought a house myself? If I got a Help to Buy UISA I would have to get a stocks and shares ISA as I cannot have a cash ISA at the same time. These looks a little complicated and would prefer a cash ISA

The £1,000 Personal Savings Allowance makes things very interesting but I'm presuming the £1,000 is your overall interest rather than individual accounts?

When I put down a deposit on a house I'd really like to have hold back £10k to again invest or save so my actual target is actually much higher. But if I ignore that, from my extensive calculations, a 3% ISA account is the best option for savings but only gets me to about £60k by January 2018. What other options do I have to boost this?

Semple

krazyk wrote: »

I should receive my inheritance early next year of about £55-65k and looking for advice.

I'm happy to lock the money away but would also like to add money monthly too. Most accounts you lock your money away don't allow transactions in either direction so this doesn't seem to be an open option.

I see a Satander 123 bank account that gives you reasonable interest up to £20k (I can use this to pay for my Virgin Media and Mobile bills and earn cashback) but it doesn't appear you earn anything extra for anything about £20k. One issue is it needs a credit check. With my credit rating of 'fair' I'm worried I might get rejected. I currently have a standard Nationwide account and I see they have a FlexDirect account that pays 5% for 1 year but only up to £2k. Again, needs a credit check. If you're not applying for overdraft facilities then you may be OK here

Help to Buy ISAs seem to be a no brainer, for every £200 the government gives you £50. If my maths is correct that 25% interest tax free. Where do I sign up? :-) The details I've read, however, state the max. bonus is £3,000. Is this for each tax year or £3,000 full-stop? If the latter then there is no need to put more than £12,000 into the ISA. I also read that you can only put £200 in per month so to get up to £12,000 will take 5 years (or 4 if you put £1k in at the start)! £3,000 is the maximum bonus you can earn from this scheme, and you're correct the minimum time to earn this would be just over 4 years.

One last issue, as I'm inheriting a house (but selling it) does that mean I'm not a first-time buyer, even though I've not bought a house myself? Correct, this only applies when you take out a mortgage.

If I got a Help to Buy UISA I would have to get a stocks and shares ISA as I cannot have a cash ISA at the same time. These looks a little complicated and would prefer a cash ISA If you've already opened an ISA account in the 2015/2016 tax year, then you're not eligible to open one on Dec 1st, you'll have to wait till the start of the new tax year.

The £1,000 Personal Savings Allowance makes things very interesting but I'm presuming the £1,000 is your overall interest rather than individual accounts? Correct

When I put down a deposit on a house I'd really like to have hold back £10k to again invest or save so my actual target is actually much higher. But if I ignore that, from my extensive calculations, a 3% ISA account is the best option for savings but only gets me to about £60k by January 2018. What other options do I have to boost this? Income from job, win the lottery...

Was easier to reply in-line with your comments.

jimjames

krazyk wrote: »

a 3% ISA account is the best option for savings but only gets me to about £60k by January 2018. What other options do I have to boost this?

Is there an ISA account paying 3%? You might be disappointed. 3 years is too short to invest for better returns, you may get 20% but you might equally be 40% down by 2018.

krazyk

Semple,

Thanks for the in-line replies. Much appreciated. :-)

krazyk

jimjames.

At time of research, which was a 2-3 months ago, yes there was a 3% ISA. Noted, the returns difference. Thanks for your reply.

colsten

krazyk wrote: »

jimjames.

At time of research, which was a 2-3 months ago, yes there was a 3% ISA.

If only that were true. It's more like 2-3 years since we have last seen 3% adult ISAs.

krazyk

colsten,

It was just a time of research for sure. Sorry I didn't take down the name of it but I wasn't too worried then as I knew the inheritance wouldn't happen this year and was to go into the detail researched about now or early next year.

I'm sure, like you say, they don't exist now and is only going to get worse until interest rates go up. Yeah real bad time to save. :-( But I guess you can only have it one way or the other; either great rates for saving with bad rates for mortgages and loans or vice versa. You get hit either way. Tsch.

colsten

No point in trying to convince me, or other regulars on this part of the forum, that you could get 3% in an adult ISA at any time this year. You could not. End. of. story.

moneyfoolish

Best you can get now is 2.55% but that's fixed for 5 years.

krazyk

colsten,

I don't really have the time to argue with you my friend. Perhaps it was a misquote on their part. Anyway...

krazyk

moneyfoolish,

Thanks for helpful the info. I'll look again closer to when I receive the inheritance.