Advice Please

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andrea_stewart
andrea_stewart Posts: 21 Forumite
edited 6 May 2017 at 4:57PM in Savings & investments
Hi

Where is the best place to keep up to £25k until I'm ready to use it to buy a home in a few months? I'm confused by all the options. I'm not a first time buyer but separated from my ex-husband and will be buying my own home.

Many thanks

Andrea
Andrea

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  • silvermum
    silvermum Posts: 223 Forumite
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    Probably in one of the interest-paying current accounts (see the list under 'Banking & Saving' tab on this page). Santander will pay 1.5% up to £20,000. Then find a home for the other £5,000.

    Or you could put all of it in the NS&I Direct Saver at 0.7%.
  • EachPenny
    EachPenny Posts: 12,239 Forumite
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    edited 6 May 2017 at 6:03PM
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    I was about to suggest the NS&I Direct Saver. :)

    If it really will only be for a few months then maximising the amount of interest you earn will not be the top priority on amount of money involved. You'd be better off keeping it in an account which is easy to set up and quick to transfer to wherever you need the money when you buy.

    The 123 account is great for long-term saving, but when you withdraw the money in a few months time you'll still have to pay the monthly fee and may only be earning cashback, or very little interest. Not sure it is worth the hassle, especially if you are applying for a mortgage as the current account application will appear in your credit history.

    Depending on who you bank with already it might be worth activating their best current account for interest, and if they have an instant access account paying more than about 0.5% (but unlikely) then using that might make more sense than opening accounts elsewhere.

    Edit: Just to add, the NS&I account takes a few days for a withdrawal to arrive in the destination account. You need to make sure the money withdrawal is done in good time for when you need to pay for the house, and that also applies to any other instant access account, they don't all have 'instant' access.
    "In the future, everyone will be rich for 15 minutes"
  • andrea_stewart
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    Hi silvermum & EachPenny

    Thanks for your replies. It's in the Santander joint account but I want to move it into my name without having to move my income and direct debits from the joint account.
    Andrea
  • EachPenny
    EachPenny Posts: 12,239 Forumite
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    It's in the Santander joint account but I want to move it into my name without having to move my income and direct debits from the joint account.

    I'd go with the NS&I option myself.

    One thing to be aware of, if you aren't already is with a joint account you are also jointly liable for any charges and debts on the account. For example if you have an overdraft facility your ex could take money out of the account too and leave you in a position where you'd have to clear the overdraft yourself or have your credit history damaged. Obviously it really depends on how well you get on with him, but it is something to be very aware of if the situation were to deteriorate.

    A friend's ex left her with a substantial debt in joint names and under solicitors advice he stopped making repayments. Through no fault of her own she now has her credit history trashed for the next six years. She also found it very difficult to close, or even remove his name, from Santander joint accounts, so you'll need to keep in mind that it is possible you'll have to close your existing account anyway.

    Unless you absolutely trust him, you should make arrangements for any overdraft facility to be stopped, and I would also move my income payment into a different account - otherwise in the worst case you could find him withdrawing your pay on the day it goes into the account, and there is not much you'd be able to do about it. Obviously if his access to the acount is already limited then this may not be an issue, but I'm assuming as you want to move the £25k out of the account that trust may become a relevant issue.
    "In the future, everyone will be rich for 15 minutes"
  • andrea_stewart
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    Hi EachPenny

    Yes, I'm aware of the dangers. We agree it's my money, I was going to ask him before moving it. We've decided to keep the joint account until the house is sold for both income (he earns much more than me) and outgoings.
    Andrea
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