Short term investment of house deposit

JamesN

Hi

We are currently in the process of selling our house. Hoping to exchange this month. We are relocating and there is very little choice at the minute of where we want to go so have decided to rent. Hoping the market picks up a bit once brexit is sorted. If it ever does get sorted.

So this leaves us with about 6-12 months with our house deposit sitting there. It’s worth £110k. Savings rates aren’t great but I’m wary how volatile the market is at present.

I’d appreciate any suggestions of where to start looking as alternatives to savings. Happy to do the research so more looking at pointers to set me in the right direction.

Thanks!

Linton

With a 6-12m month time frame you should not even think about investing. You would have somewhere uncomfortably close to 50% chance of losing money. Saving of some form are the only option.



NS&I pay a better return than high street banks for large amounts of easy access money. Anything deposited with them is guaranteed by the government.

shinytop

JamesN wrote: »

Hi

We are currently in the process of selling our house. Hoping to exchange this month. We are relocating and there is very little choice at the minute of where we want to go so have decided to rent. Hoping the market picks up a bit once brexit is sorted. If it ever does get sorted.

So this leaves us with about 6-12 months with our house deposit sitting there. It’s worth £110k. Savings rates aren’t great but I’m wary how volatile the market is at present.

I’d appreciate any suggestions of where to start looking as alternatives to savings. Happy to do the research so more looking at pointers to set me in the right direction.

Thanks!

We are doing the same thing. The only way to safeguard your money is with savings. Investments would be a bad idea as you could lose a big chunk. I'm looking at 90 day notice accounts at about 1.8% - I think that's about the best around unless you can definitely fix for a year.

JamesN

Linton wrote: »

With a 6-12m month time frame you should not even think about investing. You would have somewhere uncomfortably close to 50% chance of losing money. Saving of some form are the only option.

NS&I pay a better return than high street banks for large amounts of easy access money. Anything deposited with them is guaranteed by the government.

Thanks. I was thinking that may have been the best option.

shinytop wrote: »

We are doing the same thing. The only way to safeguard your money is with savings. Investments would be a bad idea as you could lose a big chunk. I'm looking at 90 day notice accounts at about 1.8% - I think that's about the best around unless you can definitely fix for a year.

Is that investec? 1.8% is decent. Trying to decide on the trade off between that and putting it in bonds and hoping for prizes.

shinytop

JamesN wrote: »

Thanks. I was thinking that may have been the best option.



Is that investec? 1.8% is decent. Trying to decide on the trade off between that and putting it in bonds and hoping for prizes.

yes, Investec

Zero_Sum

Theres a few of banks that offer 6 month fixed rates like masthaven.
You can get 1.45% on instant access which for the sake of 6-12 months id probably opt for

Thrugelmir

£50k each in premium bonds. Easily accessible when you need the money.

JamesN

Thrugelmir wrote: »

£50k each in premium bonds. Easily accessible when you need the money.

I don’t tend to be that lucky so I’m weary of premium bonds. With 1.8% I’d get £165 a month. So would need a fair few prizes for that.

Aretnap

90 days is a long time in the context of a house purchase. In the past I've had an offer on a house accepted on condition that I could be ready to complete in 4 weeks. If you're confident that you won't even be looking for 6 months then go right ahead... but if there's any chance that you might find your ideal home in the near future I wouldn't risk letting the purchases fall through by having my deposit locked away in a 90 day account. The 0.35% difference in interest Vs an instant access account is small change in the context of a house purchase, especially when your only holding there money for a few months.

JamesN

Aretnap wrote: »

90 days is a long time in the context of a house purchase. In the past I've had an offer on a house accepted on condition that I could be ready to complete in 4 weeks. If you're confident that you won't even be looking for 6 months then go right ahead... but if there's any chance that you might find your ideal home in the near future I wouldn't risk letting the purchases fall through by having my deposit locked away in a 90 day account. The 0.35% difference in interest Vs an instant access account is small change in the context of a house purchase, especially when your only holding there money for a few months.

Very true. Our current sale has taken 2.5 months so far so was looking at it from that angle. But you’re right. I could get lucky and have a smaller/no chain on the next purchase. Currently leaning towards premium bonds as I’m a higher rate tax payer.

shinytop

Aretnap wrote: »

90 days is a long time in the context of a house purchase. In the past I've had an offer on a house accepted on condition that I could be ready to complete in 4 weeks. If you're confident that you won't even be looking for 6 months then go right ahead... but if there's any chance that you might find your ideal home in the near future I wouldn't risk letting the purchases fall through by having my deposit locked away in a 90 day account. The 0.35% difference in interest Vs an instant access account is small change in the context of a house purchase, especially when your only holding there money for a few months.

In my case (no mortgage) 0.35% over 6 months is quite a lot. We're going to be signing up to rent for 6 months before we start looking and with cash in hand it's more likely that I'm going to be dictating timings than a seller. Fair point though.