Best one pot solution

Richtea42

Being a bear of simple brain I wanted to put my savings in one place rather than opening a set of different apps and internet accounts.
Currently getting terrible rates from HSBC 0.1 % on their Premier Saver - feeling not very special!
The balance is at 215K but about to go up to 400K. This is sparking me into getting something better sorted.
I have an ISA which I can easily move which again is with HSBC is only 0.75%. Happy for this to be in a different place. It's at 40K.
I'm looking for a simple solution with reasonable returns rather than complicated and the best returns.
Many thanks in advance.

Richard

eskbanker

Savings in any individual institution are only covered up to £85K by the Financial Services Compensation Scheme and the vast majority on here would advise you keep below that level in any one place, unless it's NS&I (Treasury-backed up to seven figures).

However, most on here would also question the wisdom of keeping such a large sum in cash deposit form, where it's highly likely to lose value to inflation. How long do you anticipate keeping it for before using it?

xylophone

Do you have a reason for keeping a very high cash balance (a house purchase perhaps)?

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

https://www.nsandi.com/income-bonds - safe to hold the lot here but the rate is hardly exciting.


http://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

OldMusicGuy

If you want simple and safe in one place, NS&I is the way to go. The returns aren't what I would call "reasonable" but they are the best you can get.

If you want better returns from savings, you can use fixed rate savings bonds that can give you up to 2.68% over 5 years. See link here: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

However, I wouldn't put more than 85K into any one account except NS&I. I currently have a "ladder" of these bonds in several of these different banks totalling around 180K that mature at different time periods. It's not hard to manage multiple accounts, they are easy to setup and manage online.

Linton

You wont get reasonable returns on £400K of cash deposits. You are unlikely to even match inflation. If you are holding the money for a long time it should be at least partially invested in shares. And if it is just for the short term safety is more important than returns.

jimjames

Richtea42 wrote: »

I'm looking for a simple solution with reasonable returns rather than complicated and the best returns.
Many thanks in advance.

Richard

The answer would be investments for the majority of it if you have no immediate need for the money and means very little effort or complication required. Obviously if for house purchase etc then that isn't an option.

kidmugsy

Richtea42 wrote: »

Being a bear of simple brain I wanted to put my savings in one place ...

The balance is at 215K but about to go up to 400K. ...

I have an ISA which I can easily move which again is with HSBC is only 0.75%. Happy for this to be in a different place. It's at 40K.

If you were to save £400k in cash at 1% AER you'd be getting £4k p.a. in interest, which would presumably be taxed. You could put £50k into Premium Bonds: their prizes are tax-free.

Holding gold sovereigns is tax-free: read up on that on the Royal Mint website.

What's the money for and when?

Richtea42

Thanks for all that sound advice.

And sorry for the lack of a piece of vital information.

I want to keep the flexibility to buy a house in a year or so. Although I may well stay put. If I don't end up using the money to buy a place I'd like to think I was doing something more constructive with it.

Getting my full set of premium bonds is probably a good place to start.

Thanks Richard

Linton

For a year or two NS&I is the easiest and safest place to hold large amounts of cash and the interest is better than from standard bank deposit accounts. It is 100% protected by Government guarantee.

Audaxer

Richtea42 wrote: »

Getting my full set of premium bonds is probably a good place to start.

I don't really think that is the best place to start as unless you are very lucky as returns are likely to be below the average win rate advertised. The best place to start would be to either put it all in NS&I products so they are fully covered, or a maximum of £85k cash per bank.

It really is worth also considering a low cost globally diverse multi asset fund of shares and bonds for some of it, unless you are planning to use it all to buy a property in the near future. You could have a look at Vanguard LifeStrategy, HSBC Global Strategy and L&G Multi Index funds - all come in a range of risk factors to suit to risk/volatility tolerance.

SG27

Definitely NS&I. No need to split the money into £85k chunks. Instant access direct saver pays 0.95%. Not a great rate but better than the near 0 you are getting now.