money from sale of house

wheelz

I am currently selling my flat and am not immediately buying something else. I am aware that I should put the money in different bank accounts as they each have a £85000 limit (guaranteed by FCS). Currently I bank with Nationwide and TSB, I need probably 3 or 4 accounts. Are there any issues that I might need to think of when I come to this? Would it be easy to open another 2 accounts? Do I go for/need current accounts or savings accounts?

capital0ne

Open ac account with NS&I - you can save £1m with them quite safely, in Income Bonds it pays 1.25% and pays out monthly - not a great rate but it's easy to set up and it's totally safe.
Gives you time to sort out where best to save/invest the proceeds of your sale

wheelz

I am not expecting to have the money until April or later and I am now trying to prepare what I shall do with it. I am not going to put my money in bonds.

G_M

wheelz wrote: »

... I am aware that I should put the money in different bank accounts as they each have a £85000 limit (guaranteed by FCS). ....

Not true.

Larger amounts received from property sales are covered temporarily.

*Temporary High Balances
From 3 July 2015, the Financial Services Compensation Scheme (FSCS) provides a £1 million protection limit for temporary high balances held with your bank, building society or credit union if it fails.
Temporary high balances are the result of specified major life events that lead to a large amount of money being held in a person!!!8217;s account for up to six months.
A depositor with a temporary high balance may be entitled to receive additional compensation from FSCS of up to £1 million per life event, with unlimited cover for personal injury claims.
Proceeds resulting from the following life events are categorised as temporary high balances:
Sums paid to the depositor in respect of:

• Real estate transactions (property purchase, sale proceeds, equity release)
• Benefits payable under an insurance policy
• Personal injury compensation (unlimited amount)
• Disability or incapacity (state benefits)
• Claim for compensation for wrongful conviction
• Claim for compensation for unfair dismissal
• Redundancy (voluntary or compulsory)
• Marriage or civil partnership
• Divorce or dissolution of their civil partnership
• Benefits payable on retirement
• Benefits payable on death
• A claim for compensation in respect of a person!!!8217;s death
• Inheritance
• Proceeds of a deceased!!!8217;s estate held by their Personal Representative

https://www.fscs.org.uk/what-we-cover/compensation-limits/deposit-limits/

ValiantSon

wheelz wrote: »

I am not expecting to have the money until April or later and I am now trying to prepare what I shall do with it. I am not going to put my money in bonds.

Why not? The NS&I Income Bond is a savings product, it is not an investment bond. Your money will be completely protected and will be earning some interest while you explore other options for maximising interest.

G_M is also correct that your money will be temporarily protected in a normal account too, but of course it won't be earning any interest.

jimbog

Be careful that each bank is not in the same family of banks e.g. RBS and NatWest as the £85K is for each banking group.

I had to do this a few years ago - a pain in the rear as I had so many usernames/passwords/PINs to remember!

agrinnall

jimbog wrote: »

Be careful that each bank is not in the same family of banks e.g. RBS and NatWest as the £85K is for each banking group.

It's not true in that example, RBS and NatWest have separate banking licences and separate FSCS cover. It does apply to some banks within the group, for example Child & Co and Drummonds are both included with RBS.


https://personal.rbs.co.uk/personal/shared-content/fscs-wording.html

capital0ne

wheelz wrote: »

I am not expecting to have the money until April or later and I am now trying to prepare what I shall do with it. I am not going to put my money in bonds.

Ahh yes, you're getting a bit mixed up these aren't corporate bonds or gilts that can fluctuate. It's just the name NS&I give them, and my mistake only 1% interest.

Read more here

Rate 1.00% gross/AER
Access No notice, no penalty
Tax Taxable, paid gross

G_M

ValiantSon wrote: »

G_M is also correct that your money will be temporarily protected in a normal account too, but of course it won't be earning any interest.

That depends on the account!

There are savings accounts paying more than NS&I's 1%.

wheelz

I was just after things I hadn't thought of. For instance I've never had a savings account that wasn't with a 'bank' where I also have a current account. Once I come to transfer my money (for buying) I probably need it to go to a(nother) current account. Does that attract a fee for large amount. Or a fee at all?

wheelz

G_M wrote: »

Not true.

Larger amounts received from property sales are covered temporarily.

https://www.fscs.org.uk/what-we-cover/compensation-limits/deposit-limits/

That is helpful I can then leave it in there for 6 months should I not want to move it away from the account where it's in.