Worth opening a easy access saving for just few month?

eskbanker

ValiantSon wrote: »

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.

This comes down to interpretation, the alternative viewpoint (as expressed on another recent thread) being that money to be used for a property purchase is covered by the FSCS temporary high balance limit, based on the inclusion of 'property purchase' as a separate and different entry from 'sale proceeds' in the list quoted in earlier posts, i.e.:

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
....

AirlieBird

https://www.fscs.org.uk/globalassets/misc/thb-evidence-requirements-v6-final.pdf
Temporary High Balances
Written evidence requirements

The evidence required must be original documents, and must be posted to FSCS in hard copy format with the application form.

Property transaction – purchase
• An original letter from the Claimant’s solicitor/conveyancer detailing the offer, including the:
o Address of the property being purchased; and
o Date, amount and status of the offer as at the date the Bank failed.

• If no solicitor/conveyancer was appointed, an original letter from the estate agent appointed in relation to the property detailing the Claimant’s offer (as set out above).

bowlhead99

AirlieBird wrote: »

https://www.fscs.org.uk/globalassets/misc/thb-evidence-requirements-v6-final.pdf
Temporary High Balances
Written evidence requirements

Effectively if they are pooling all the money in one place as part of the process of making a property purchase, that's an allowable reason for wanting protection for temporarily having a balance over the usual protection limit.

But if they are just looking to buy or 'negotiating an offer' that nobody's accepted yet (i.e. there isn't a memorandum of sale issued for a specific house and the solicitors aren't engaged to work on it) then it would be difficult to prove and a bank failure could be catastrophically expensive (not that bank failures are particularly frequent things )

ValiantSon

bowlhead99 wrote: »

Effectively if they are pooling all the money in one place as part of the process of making a property purchase, that's an allowable reason for wanting protection for temporarily having a balance over the usual protection limit.

But if they are just looking to buy or 'negotiating an offer' that nobody's accepted yet (i.e. there isn't a memorandum of sale issued for a specific house and the solicitors aren't engaged to work on it) then it would be difficult to prove and a bank failure could be catastrophically expensive (not that bank failures are particularly frequent things )

Thank you.

Yes, that is what I was referring to. Given that the OP is looking for a home for the money for a few months it suggests (although I could be wrong) that they have not actually entered into a purchase yet, and would not, therefore be entitled to the higher value protection.

For the sake of a few hundred pounds interest I'd personally rather ensure that my money was protected by having split it across four accounts (realistically we are looking at £200-£300 assuming that they buy within six months) than run the risk of losing £215,000 by sticking it all in one account because some people on the internet thought that it would be okay! At a £300 "cost" (0.14%) to insure against a potential £215,000 loss I'd say it was worth it.

Owain_Moneysaver

Apart from the bank going under, which may or may not be covered by FSCS protection as discussed, a large balance in a current account is very vulnerable to loss by fraud.

greenglide

a large balance in a current account is very vulnerable to loss by fraud.

Really?

Unless you do something really stupid (transfer it to a random person who rings up etc) FSCS protects fraud by the bank etc.