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Large lump sum investment - What would you do?

Hello, I'm about to sell a property and will temporarily have a large lump sum available, this will be temporary as I'd be looking to use this as a deposit within the next 12 months, I'd estimate it will be £100k+
Where would you put this cash in the short term, to ensure it beats inflation? Investing in S&S in the short term would be quite risky, but interest in savings accounts barely beats inflation.

Comments

  • Albermarle
    Albermarle Posts: 25,936 Forumite
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    Many posters ask the same question ' I want to match/beat inflation with no risk '
    The answer is to beat inflation you need to take investment risk . There can be short periods when savings interest rates are above inflation ( especially if you have a long term fix or a regular saver) but for this amount of money at the money at the moment you have the following choices:
    NS & I - Income bonds: direct saver ; premium bonds 
    Bank/building society - easy access account for up to £85K per institution
    Investing in S& S for only 12 months is a no .
    https://moneyfacts.co.uk/savings-accounts/easy-access-savings-accounts/
  • thegentleway
    thegentleway Posts: 1,047 Forumite
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    I'd put it in savings accounts. I wouldn't be worried about inflation for those timeframes.
    No one has ever become poor by giving
  • Se99paj said:
    Hello, I'm about to sell a property and will temporarily have a large lump sum available, this will be temporary as I'd be looking to use this as a deposit within the next 12 months, I'd estimate it will be £100k+
    Where would you put this cash in the short term, to ensure it beats inflation? Investing in S&S in the short term would be quite risky, but interest in savings accounts barely beats inflation.
    Are you able/willing to risk your £100k+ being worth e.g. £70k in 12 months time?
    If not - you for the best easy access/fixed rate/notice savings accounts and/or premium bonds.
  • xylophone
    xylophone Posts: 45,426 Forumite
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    NS&I Income Bonds?
    Premium Bonds in the hope of the big win? :)
  • tacpot12
    tacpot12 Posts: 9,014 Forumite
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    NS&I is the best option for you as the temporary protection from the FSCS for balances over £85K only lasts for 6 months. You could split the amount between two banks, but this would be unnecessary if you use NS&I.
    S&S ISA is a no-no, you are as likely to lose money as gain it over that short a period. 
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • DiggerUK
    DiggerUK Posts: 4,992 Forumite
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    It would be handy if MSE had a bot algorithm installed that automatically said "NS&I" when such threads appear.
    Honest Se99paj, that's best advice from everyone. Only viable alternative is cash under the mattress..._

  • d63
    d63 Posts: 328 Forumite
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    edited 19 August 2020 at 11:17AM
    tacpot12 said:
    NS&I is the best option for you as the temporary protection from the FSCS for balances over £85K only lasts for 6 months. You could split the amount between two banks, but this would be unnecessary if you use NS&I.
    S&S ISA is a no-no, you are as likely to lose money as gain it over that short a period. 
    was there not some temporary increase in the  temporary protection just recently for periods of up to 12 months?
    https://www.fscs.org.uk/how-we-work/temporary-high-balances/
    https://www.fscs.org.uk/media/press/2020/aug/thb-coverage-extended/
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Se99paj said:
     but interest in savings accounts barely beats inflation.
    Better than nothing, or losing money. 
  • Savings account or premium bonds. You don't really have any other alternative without putting your capital at risk. Given you're only thinking about sitting on this for 12 months, the opportunity cost is quite low with inflation being low, so I wouldn't worry too much about 'losing out', especially if you're buying a new home with the money as I suspect house prices will be at a similar price or cheaper than they are currently, once furlough schemes are ended and money creation is eased. 
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