Where do people keep a lot of money?

curtis122

If you have a lot of money, I'm not necessarily talking millions but more 300 - 600k where do you put it?


I don't have that much but have enough where I have a lot of accounts taking advantage of nearly all the savings accounts with the slighter better rates 2% + but as nearly all of these only run for a year and only allow you to pay in X amount a month. All of these accounts are maxed out as in I pay in the full allowed amount each month. I do have an ISA and that's the only place I can put any extra but the rate is not great 1.5% so ideally prefer to put an extra money in one of the savers out there on a better rate rather than in there for now.


Where if you have more do you keep it as most current accounts will only pay interest up to certain amount then you earn nothing on the amount above that.


I miss the days you could have all your savings in one place and be earning on the whole lot a decent rate!

colsten

Most people wouldn't keep these sums of money in cash savings for any length of time. They'd be looking to use investments instead, possibly an S&S ISA or pension, or both

AnotherJoe

I bet you dont miss inflation at 15% though.
I keep a lot of money in investments. Its the only way, long term of keeping up with inflation.

bostonerimus

I keep a couple of year's spending in the bank and an easy access saving account as my cashflow/emergency fund. Everything else is held in equity and bond funds in a regular investment account and tax advantaged retirement accounts.

Voyager2002

AnotherJoe wrote: »

I bet you dont miss inflation at 15% though.
I keep a lot of money in investments. Its the only way, long term of keeping up with inflation.

For most of the period between 1980 and 2010 you could easily find a savings account that paid more in interest than the rate of inflation. That has not been the case over the last decade, which is why Martin often tells us that savings accounts are really "losing accounts".

Voyager2002

Once you have "maxed out" the regular savings accounts and a few others (which are really loss-leaders from the banks) it is not possible to earn enough interest on your money to keep up with inflation in a no-risk account. So people have to chooose between accepting some degree of risk and so the possibility of losing part of their investment, or the certainty of losing a bit of their wealth every year as a result of inflation. The choice depends on each person's attitude to risk: popular options include buying property to let; shares in individual companies; funds that reduce risk by buying shares in lots of different companies; peer-to-peer lending; as well as bonds issued by governments and well-established companies.

DiggerUK

curtiss122, What are you saving for, also when will you need to start spending this money......5 years? 25 years?
Could we have some details of housing, family situation and retirement provision..._

Brian65

Voyager2002 wrote: »

For most of the period between 1980 and 2010 you could easily find a savings account that paid more in interest than the rate of inflation.

Depends on where you got your 'rate of inflation'
Government statistics counted things like DVD players, whilst ignoring housing costs.

Brian65

AnotherJoe wrote: »

I bet you dont miss inflation at 15% though.

Indeed
Interest rates on their own are useless
We need to compare the NET rate of interest minus the REAL rate of inflation.
Obvious to some, but surprising how many people don't realise that.

Fingerbobs

Personally, with that kind of money sitting about long-term, I would invest in property. That's just me though.

colsten

Fingerbobs wrote: »

Personally, with that kind of money sitting about long-term, I would invest in property. That's just me though.

It would be the worst possible investment in my opinion, especially if by 'property' you mean residential letting. Unless you have a very high risk tolerance, the key to successful investing is diversifying. Putting all your money into bricks and mortar isn't diversifying.