Best place for £450k house sale funds

mac123

Hi all
We sold our house and moved into rented accommodation until we find somewhere new to buy - this has resulted in our bank balance sitting at £450k ... we are likely to need this in 6-12 months for a deposit depending if we find anywhere suitable.
What's the best thing to do with the money in the meantime? Is there a short term, easy access investment/account which might give us some return (better than the 0.1% current account anyway)?
Thanks

grumiofoundation

NSandI income bonds all savings protected (backed by treasury) paying 1.15% at the moment. 

george4064

First of all, you should note that your money is protected beyond the usual £85,000 FSCS protection under whats called the 'Temporary high balance protection scheme'. As you have recently sold a property you have FSCS protection up to £1million for up to 6 months. Read more on this here: https://www.fscs.org.uk/how-we-work/temporary-high-balances/

A good place to review your options would be to read here: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

• As already pointed out, your easiest option would be to stick all the £450k into NS&I Income bonds earning 1.16%

• You could look to earn the highest rate of interest and opt for a 1 year fixed term account, you could earn as much as 1.3% taking this route. But it does limit you as you won't be able to touch any of that money until the product matures.

• Alternatively, you could go for a notice savings account, which is less flexible than NS&I but at least you would be able to withdraw your money (with notice) as opposed to the fixed term account. Moneybox 95 day notice will earn you 1.25% (max deposit £85k though) and/or Market Harborough BS 75 day notice at 1.2% (max £500k).

• Finally, you could opt to use a combination of the above at your discretion on whatever you feel most comfortable with.

coyrls

It wouldn't make sense taking out a 1 year fixed term account with £450K, when the temporary high balance protection scheme only lasts 6 months,

george4064

coyrls said:

It wouldn't make sense taking out a 1 year fixed term account with £450K, when the temporary high balance protection scheme only lasts 6 months,

Good point, then maybe only max £85,000 in each 1 year fix if OP decides to go down that route.

lhsecons

NS&I is the most straightforward if you want it all in one place. You might consider putting £100,000 of it into premium bonds to reduce the tax you will have to pay on the interest as these are tax free. Similarly you could put £20000 each into an instant access cash ISA.