250k savings

Rapheal24

HI,
I have accumulated around £250,000 savings thanks to lucky gambling bets and some inheritance. What is the best bank account I can put it in? I don’t plan to use the cash for at least another 18 months due to being in full time education. Thanks.

Linton

The easiest is National Savings (NS&I) which has an unlimited government guarantee.  The banks are limited to £85K so you would need accounts with 3 separate banks to hold your £250,000. Wherever you put the money is not going to earn a large amount of interest, perhaps 1%/year.  Banks do not generally pay high interest on large sums.

Something to consider - might you really need the whole of the £250K in 18 months time?  If you will then you need to keep it all in cash.  However if you can put aside say £150K for 10+ years you could invest that money into shares or more cautious funds which over the long term should give you a much better return.  If you want to go down that route it may be worthwhile paying for advice.

colsten

What are you planning to use the money for in 18 months time? All of it at once? Some of it then, and some later?  How much of it would you be happy to lose?

Rapheal24

colsten said:

What are you planning to use the money for in 18 months time? All of it at once? Some of it then, and some later?  How much of it would you be happy to lose?

Either a PHD, if I get the grades, and / or an apartment. I’d be happy to lose none of it.

Rapheal24

Linton said:

The easiest is National Savings (NS&I) which has an unlimited government guarantee.  The banks are limited to £85K so you would need accounts with 3 separate banks to hold your £250,000. Wherever you put the money is not going to earn a large amount of interest, perhaps 1%/year.  Banks do not generally pay high interest on large sums.

Something to consider - might you really need the whole of the £250K in 18 months time?  If you will then you need to keep it all in cash.  However if you can put aside say £150K for 10+ years you could invest that money into shares or more cautious funds which over the long term should give you a much better return.  If you want to go down that route it may be worthwhile paying for advice.

I have a 12 month ISA paying 1.49% annual interest. Is there anything better than this?

Linton

Rapheal24 said:

Linton said:

The easiest is National Savings (NS&I) which has an unlimited government guarantee.  The banks are limited to £85K so you would need accounts with 3 separate banks to hold your £250,000. Wherever you put the money is not going to earn a large amount of interest, perhaps 1%/year.  Banks do not generally pay high interest on large sums.

Something to consider - might you really need the whole of the £250K in 18 months time?  If you will then you need to keep it all in cash.  However if you can put aside say £150K for 10+ years you could invest that money into shares or more cautious funds which over the long term should give you a much better return.  If you want to go down that route it may be worthwhile paying for advice.

I have a 12 month ISA paying 1.49% annual interest. Is there anything better than this?

ISAs are limited to £20K/year, so most of your savings will be outside isas.  As to the max interest, you will have to check but from a quick look it seems the highest is now 1.45%. I would expect rates to continue to fall over the next year.  But even if you can get 1.45% that would almost certainly be less than inflation so you will be losing money in real terms.

grumiofoundation

Rapheal24 said:

Linton said:

The easiest is National Savings (NS&I) which has an unlimited government guarantee.  The banks are limited to £85K so you would need accounts with 3 separate banks to hold your £250,000. Wherever you put the money is not going to earn a large amount of interest, perhaps 1%/year.  Banks do not generally pay high interest on large sums.

Something to consider - might you really need the whole of the £250K in 18 months time?  If you will then you need to keep it all in cash.  However if you can put aside say £150K for 10+ years you could invest that money into shares or more cautious funds which over the long term should give you a much better return.  If you want to go down that route it may be worthwhile paying for advice.

I have a 12 month ISA paying 1.49% annual interest. Is there anything better than this?

You can only pay in 20000 into ISA so you will have to keep the rest outside ISA (and thereby liable for tax on interest). 

best 1 year (non-ISA fixes) 1.4-1.5% up to ~1.8% for 5 year fixes. Best easy access 1.16% NSandI

colsten

Rapheal24 said:

colsten said:

What are you planning to use the money for in 18 months time? All of it at once? Some of it then, and some later?  How much of it would you be happy to lose?

Either a PHD, if I get the grades, and / or an apartment. I’d be happy to lose none of it.

If you want an apartment, presumably you'd use all your money in one go. So you can't tie it up for more than 18 months max.

If you use it to finance your PhD, you obviously wouldn't use it all at once, so you can put some of it away for much longer.

In either case, you shouldn't have more than £85k with the same financial institution - google FSCS.

You could consider starting a pension - at present you can't put more than £2,880 per tax year into it as you are not working but it's one of the best investments you can make as you get it topped up to £3,600 by the Treasury. Also check out a LISA.

For the rest, there is a comprehensive list of rates on https://moneyfacts.co.uk/

lhsecons

You could put £50000 into premium bonds. With average luck your return will be slightly above NS&I savings and there’s always the chance of a big prize.

steampowered

With that sum of money, you need to take a long term view. That means managing your wealth so that it grows n the long term. 

You shouldn't be keeping that sum of money in a bank account. Cash in a bank account loses money every year due to inflation.

I would be doing the following:
- Start educating yourself about how to sensibly invest in the stock markets. The easiest way of doing this is to simply invest in a diversified multi-asset fund (such as a Vanguard Lifestrategy fund).
- Open a stocks & shares ISA, and invest the maximum contribution (£20k) each year.
- Open a standard stocks & shares account, and put a substantial amount of money into that.
- Keep perhaps £20k in a bank account to cover your short term cash needs. If you need to release more funds in future (e.g. to fund a house deposit

Audaxer

Rapheal24 said:

Linton said:

The easiest is National Savings (NS&I) which has an unlimited government guarantee.  The banks are limited to £85K so you would need accounts with 3 separate banks to hold your £250,000. Wherever you put the money is not going to earn a large amount of interest, perhaps 1%/year.  Banks do not generally pay high interest on large sums.

Something to consider - might you really need the whole of the £250K in 18 months time?  If you will then you need to keep it all in cash.  However if you can put aside say £150K for 10+ years you could invest that money into shares or more cautious funds which over the long term should give you a much better return.  If you want to go down that route it may be worthwhile paying for advice.

I have a 12 month ISA paying 1.49% annual interest. Is there anything better than this?

You won't get much better than that rate at this time. Although interest rates are currently less than inflation, any money you will need in 18 months time should still be kept in savings. Only consider investments for any part of the money you will definitely not need access to for at least 10 to 15 years.