Worth opening a easy access saving for just few month?

cybervic

Partner and I have sold all our assets and have about 300K cash sitting in our current account ready to buy our first place. We are wondering if it's worth opening an instant saving account to earn some interests before we hand it out to solicitor/vendors? If so, do we only look for the one the pays monthly interests? We are in the process of negotiating an offer but not sure if it'll be accepted at all.

thanks in advance.

Keep_pedalling

Stick it in NS&I income bond. It provides safety and a little bit of monthly interest.

xylophone

https://www.nsandi.com/income-bonds

monthly interest @1% - easy access.

ValiantSon

cybervic wrote: »

Partner and I have sold all our assets and have about 300K cash sitting in our current account ready to buy our first place. We are wondering if it's worth opening an instant saving account to earn some interests before we hand it out to solicitor/vendors? If so, do we only look for the one the pays monthly interests? We are in the process of negotiating an offer but not sure if it'll be accepted at all.

thanks in advance.

Yes, no reason why you shouldn't. It doesn't matter whether interest is paid monthly or annually. You will earn interest on the money in the account for each day that it is there. If interest is paid annually you will just have to wait for a year to receive the payment, unless you close the account when the interest owing will be paid at that point.

Keep_pedalling wrote: »

Stick it in NS&I income bond. It provides safety and a little bit of monthly interest.

As the money is the proceeds from a sale they will be covered by the FSCS's "temporary high balances" protection for six months from the initial deposit, i.e. when the money was paid into the first account that it sits in. If the time period is likely to extend beyond that then it could be divided (at the appropriate time) between four different savings accounts (bearing in mind both of them could have one each of the best paying accounts, e.g. two Tesco accounts at 1.3% and two Paragon accounts at 1.25% - the best paying today).

The penalty for early withdrawal from an NS&I Income Bond is 90 days interest, which on £300,000 is £1072.80. This would mean that, if they withdrew the money after six months then they would earn £1,102.20 - an effective interest rate of 0.74%.

xylophone wrote: »

https://www.nsandi.com/income-bonds

monthly interest @1% - easy access.

Still beaten by using easy access accounts from the banks, and just as safe.

ColdIron

My experience of opening my first NS&I account was that they are quite slow about it, perhaps have a plan B

ColdIron

ValiantSon wrote: »

The penalty for early withdrawal from an NS&I Income Bond is 90 days interest

NS&I Income Bonds are easy access, it's the Guaranteed Income Bonds that have a penalty for early withdrawal. Tesco and Paragon would get my vote

ValiantSon

ColdIron wrote: »

NS&I Income Bonds are easy access, it's the Guaranteed Income Bonds that have a penalty for early withdrawal. Tesco and Paragon would get my vote

Ah, I hadn't realised that there were two different ones. Thanks for pointing it out.

I've just looked at the Income Bonds and see that they are paying 1%, so I'll still stick with the Tesco and Paragon recommendation too.

xylophone

As the money is the proceeds from a sale they will be covered by the FSCS's "temporary high balances" protection for six months from the initial deposit,

https://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-temporary-high-balances/
Payments in connection with the following could be categorised as temporary high balances:

Sums paid to the depositor in respect of:

Real estate transactions (property purchase, sale proceeds, equity release) relating to a depositor's main or only residence
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's estate held by their Personal Representative

The OP says that "assets" have been sold but not necessarily any of the above?

The house to be purchased seems to be a first property.

ValiantSon

xylophone wrote: »

https://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-temporary-high-balances/
Payments in connection with the following could be categorised as temporary high balances:

Sums paid to the depositor in respect of:

Real estate transactions (property purchase, sale proceeds, equity release) relating to a depositor's main or only residence
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's estate held by their Personal Representative

The OP says that "assets" have been sold but not necessarily any of the above?

The house to be purchased seems to be a first property.

Very true. I misread their post to mean that they had sold a property. If they haven't then splitting the money between the Tesco and Paragon savings accounts as described will given them full FSCS protection, and the best interest rate on an easy access basis. (I wouldn't recommend opening current accounts as the timescale is short and the impact on credit files in possible anticipation of a mortgage application would not be advisable).

cybervic

Thanks guys,

The money were released from stock/share/mutual funds as well as early inheritance from both partner and my parents. Can it be counted as Temporary high balance as the money will only be used for property purchase and nothing else.

ValiantSon

cybervic wrote: »

Thanks guys,

The money were released from stock/share/mutual funds as well as early inheritance from both partner and my parents. Can it be counted as Temporary high balance as the money will only be used for property purchase and nothing else.

No, sorry. Inheritances are, but only for six months from the date they are deposited into your account for the first time. Proceeds from sale of investments aren't covered by temporary high balances. Splitting the money as suggested will, however, give you full protection.