Basic bank account

Dee_Chan

Hi.
Not really sure where to ask, this, so here seems as good a place as any.
I recently lost my Dad, and as a beneficiary of his will, am set to get a substantial inheritance.
I am two years out of DRO, following a difficult divorce, and have only the most basic of bank accounts.
Is it appropriate to keep such a large amount of money (my share is in excess of 80k) in a basic bank account, where it is earning no interest?
Having had the past DRO, I am currently persona non grata as regards any other type of account, - is that likely to change?
Sorry if I am asking in the wrong place.
Dee:beer:

Yorkshireman99

You need to invest as much as you can in something like an ISA that can take £20K per tax year. All the interest is tax free.

Nodding_Donkey

For a short term fix you can stick £50k in premium bonds. Although they pay no interest (which doesn't really matter when interest rates are so low) you do have the chance of a win and access is only a couple of days after the initial qualifying period which is up to a month.

chesky

I think, although you might not be able to open a new current account, there shouldn't be a problem opening a savings account. You can't remove cash you haven't got from a savings account, so no fear of going into overdraft.

Keep_pedalling

You will only be restricted on current accounts, savings accounts and ISAs should be no problem. Having said that cash ISAs have been an absolute waste of time for nearly a decade now as the interest rates are lower than non ISA rates. And now that as a basic rate tax payer you can earn £1000 in interest tax free outside an ISA they are less attractive than ever.

As a temporary home that is 100% safe you can place the cash in NS&I which is instant access. For the longer term consider S&S ISAs, personal pensions and P2P.

As none of us know what your long term financial plans and requirements are, it would be pointless making any more detailed suggestions. Pop over to the savings and investment forum and ask for advice there, but provide more details on your current financial position including short and long term goals.

Dee_Chan

Thanks to all for the responses.
I meant also to ask is it ok to have such a large amount of money appear in a basic account, should I mention it first or should I open a savings account now? Probate was applied for a couple of weeks ago, and my darling Dad, was a very organised man, so things should be quite straightforward.
The Solicitor also mentioned possible interim payment (prior to property being sold), which I am guessing is from residual monies gathered from shsres and bank accounts, after taxes are accounted for?

Sorry for all the questions.

Yorkshireman99

One of the worst investment you can make. A decent ISA is a much better investment.

SevenOfNine

Don't put more than £85k in one place & makes sure that place/s has FSCS protection https://www.fscs.org.uk/what-we-cover/compensation-limits/

Personally, I'd be preparing where you plan to park your money temporarily sooner rather than later, & open accounts now (savings or ISA) so it's ready to take it as soon as it's released. Might as well earn interest from day one (albeit low interest) than none at all in your basic account.

Keep it as instant access initially, while you decide what to do with it long/er term. Will just give you some breathing space to think & learn how to best manage it.

Remember that the annual ISA limit is currently £20k, ISA providers with accounts that let you withdraw & replace funds are limited, though funds can be transferred between providers either wholly or sometimes partially easily (usually). You are not allowed to exceed a 20k total deposit in a year.

See the Savings & Investment forum for more detailed advice & to find the best paying interest accounts (though it has to be said, they're all rubbish at the moment, better payers are the bank accounts which sadly don't sound like they're an option for you).

Take a look at the Banking forum as well, just in case someone has an option to be considered there. Someone may well have some suggestions to improve your banking score a bit as well.

Sorry for your loss.

Malthusian

An ISA is just a tax wrapper, within which you can hold a whole spectrum of investments; all "ISA" means is that you don't get taxed on the income or gains. A cash ISA will pay slightly more interest than a basic bank account but it will still lose its value over time due to inflation.

Whether it is appropriate to keep all your £80k in cash depends on your attitude to risk and how likely you are to spend the money in the next 5 years or so.

The Savings and Investments board will be able to give you more help. Once you have the money this is an investment question rather than an inheritance one.

Silvertabby

If the money will be paid into your current account in the first instance, tell your bank that you are expecting a payment of £X from XX. Otherwise, they will just faff around trying to contact you to check that you are not money laundering.

Keep_pedalling

Short term deposits over £85K are covered in current acounts, from things like house sales and inheritances.

Placing the money in NS&I gives unlimited (government funded) cover so is probably the best place until you decide what to do for the long term.

Taking advice from a IFA would be wise if you little experience with handling large sums of money.