Where to put £250k for 6-12 months

Bradleyc200

About to complete the sale of my house leaving me with a £250k Santander 123 current account balance. I'll be renting for 6-12 months until a property we might want comes on the market.
So trying to figure out the best option to spread the £250k across individual banks (assuming I have £250k for after the 6 month and £1 million FSCS protection period if a bank goes bust).

Options I think are:
1. Hedge the odds of winning and buy Premium Bonds - sell when ready to buy our new house.
2. Spread across top paying current accounts (although only gain reasonable interest rate up to interest rate cut offs eg 5% up to 3 or 5k with first direct, Lloyds etc).
3. Wife, me and 10 year old son open best savings rate account individually and spread that way.
Or is there another alternative way to maximise £250k return as a low risk short term investment? Feedback from all most welcome. Thanks.

Sus59

I'm in exactly the same position and this is what I've done: 15,240 in cash Isa (currently 1.3% at First Direct but dropping to 0.9% on 18 October), 20K in Santander 123 acc, 50K in premium bonds. Remainder in National Savings income bonds (1%). Don't think there are any (safer or as safe) alternatives, but willing to be proven wrong.

xylophone

and 10 year old son

Not a good idea - the money would become an absolute gift to your child and your child's money should not be used to fund the purchase of your house.

The £100 rule would apply to interest.

https://www.gov.uk/savings-for-children

http://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-temporary-high-balances/

You could choose to hold the lot in NS&I Income Bonds and not worry about THB protection or holding more than £75,000 in one account.

Or you could go the high interest current accounts route for as much as possible and use savings accounts for the rest.

Or mix and match.....

YorkshireBoy

xylophone wrote: »

Or you could go the high interest current accounts route for as much as possible

But even as a couple you'd only get £130K in high interest current accounts, and this would involve opening 22 current accounts between you! The difference between the return on these compared with putting the same amount in a 1% savings account is around £650 over the worst case scenario of 5 months (your lower end figure of 6 months less start up/shut down losses).

You may consider it's not worth the hassle, and stick this £130K with the other £120K somewhere else?

Bradleyc200

Sounds a good approach from Sus59. Max out on isa allowance then with Santander 123 and premium bonds etc. Think wife can also get Santander 123 account giving 40k combined at the to be lower interest rate but still good. No rich pickings for being low risk and cash rich these days but your feedback makes sense. Thanks for taking the time to reply.

Bradleyc200

xylophone wrote: »

Not a good idea - the money would become an absolute gift to your child and your child's money should not be used to fund the purchase of your..

Very good point - something to avoid!!!!

Bradleyc200

YorkshireBoy wrote: »

But even as a couple you'd only get £130K in high interest current accounts, and this would involve opening 22 current accounts between you!

Agreed to much hassle - 1 or 2 current accounts is enough in itself - 22 yikes, probably bad for future credit checks LOL. Spreading and saving £250k in the short term looks so far like a pic and mix approach - maximise isa allowance, then capitalise current account Best Buy (still Santander 123 with 20k x2 on two accounts (him and hers account)) then some in premium bonds / NS&I bond type investment.