Where to put short term lump sum

Sandy67

Hello everyone
I am new to this forum so hope this is the correct place to post.

We are selling our house and will shortly receive the proceeds of the sale. It will be about 9-12 months before we have to spend the money on our new house and I don't know what to do with it in the meantime. We bank with Nationwide and have used our cash isa allowance for this year, we can deposit some in Nationwide to take us up to our £85000 limit. We can also put maximum in premium bonds. This will leave us with about £120k that we need to find a short term home for. I was just going to open an easy access savings account with another bank or building society but does anyone have any better ideas? Thanks in advance

chockydavid1983

NS&I is usually a good option as the £85k limit doesn't apply.

ceh209

The £85,000 limit doesn't apply for up to six months for temporary high balances:
https://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-temporary-high-balances/

(just in case it will only actually be 6 months instead of 9-12, or if it helps someone else...)

ValiantSon

It depends what sort of return you were looking for. The easiest option would be to put it all into NS&I investment bonds, but that won't deliver the best return (although it isn't terrible).

If you have the mindset to do so then maxing out interest paying current accounts would be better, but this will require some (little) time and maintenance.

I have to say it because I am contractually obliged to do so, and there are several people on here who would be disappointed if I didn't, that the money in the interest bonds probably isn't the best option due to the odds of you winning more than you could make in interest by holding it elsewhere. With the maximum £50,000 in premium bonds for one year you are most likely to win £500, but in an instant access savings account at 1.3% (ICICI Bank) you would earn £650. The difference would be greater with a combination of current accounts, or notice accounts.

I haven't suggested one year fixed rate savings bonds because your time frame is less than one year.

Sandy67

Thanks for all your replies. Very useful that the limit does not apply for temporary high balances- this will give me time to look into the other options.