Reaching 85k savings limit. What to do?

colsten

Moreover, Nationwide’s interest rates are so dreadful now that you’d ask why anyone, let alone a MoneySavingExpert, would keep any substantial sums of money in Nationwide. Even Premium Bonds promise to pay more than Nationwide. If you want to be in the Nationwide prize draws, this can be achieved with minimal outlay. 

OP, if you really want/need to keep £85K in cash, moneyfacts.co.uk lists all available FSCS-protected accounts.

eskbanker

Bobziz said:

For me unfortunately it's not so easily mitigated.

Care to share why (in case it's relevant to OP)?

Albermarle

colsten said:

Moreover, Nationwide’s interest rates are so dreadful now that you’d ask why anyone, let alone a MoneySavingExpert, would keep any substantial sums of money in Nationwide. Even Premium Bonds promise to pay more than Nationwide. If you want to be in the Nationwide prize draws, this can be achieved with minimal outlay. 

OP, if you really want/need to keep £85K in cash, moneyfacts.co.uk lists all available FSCS-protected accounts.

At one point I had a six figure sum with Nationwide, but have now moved most of it . Not because of any worries about them going bust but because they slashed their  interest rates earlier last year .

Bobziz

eskbanker said:

Bobziz said:

For me unfortunately it's not so easily mitigated.

Care to share why (in case it's relevant to OP)?

It's not relevant to the OP, but my only practical options are to stay with the NW at 0.4% or go with NS&I at 0.15%.

eskbanker

Bobziz said:

eskbanker said:

Bobziz said:

For me unfortunately it's not so easily mitigated.

Care to share why (in case it's relevant to OP)?

It's not relevant to the OP, but my only practical options are to stay with the NW at 0.4% or go with NS&I at 0.15%.

But that still doesn't explain why you feel you can't put the excess somewhere else at similar rates to Nationwide?

SouthCoastBoy

I have a lot of cash, and got fed up of chasing an extra 0.1% here and there, returns are really poor, so now most of it is with NS&I (0.15%) and premium bonds and the rest in Nationwide (within the 85k limit). Savers have been hammered for years on interest rates, but they are really very poor at the moment. As inflation takes off this is going to be more of an issue

wmb194

A massive balance sheet won't save you from going, 'pop.' Just ask RBS, ABN Amro et al. One of the key things to look at is a bank's/BS's CET1 ratio which in NW's case is currently reported to be 36.2%*, which is absolutely mad - it put a lot of work in to retain profits and thus build its loss absorbing capital after Co-op Bank blew itself up and it's one of the reasons its deposit rates have been so lousy in recent years. I wouldn't worry about being a little over the FSCS limit with it but if it's a concern and it's easily mitigated just move it somewhere else - if you want instant access I'd look at using Marcus by Goldman Sachs.

*"Nationwide’s capital position remains strong with a Common Equity Tier 1 (CET1) ratio of 36.2% (4 April 2020: 31.9%) and a UK leverage ratio of 5.2% (4 April 2020: 4.7%). Both ratios remain in excess of the regulatory capital requirements of 12.8% and 3.6% respectively, which include the incumbent CRD IV buffers. The capital requirements reflect the impact of the measures announced by the Bank of England, specifically the reduction of the UK countercyclical buffer to 0%, in response to the outbreak of Covid-19."
https://www.nationwide.co.uk/-/media/MainSite/documents/about/corporate-information/results-and-accounts/2020-2021/pillar-3-disclosure-q3-2020-21.pdf

jimjames

Bod_1234 said:

I do a bit of small time trading on Freetrade, a few thousand a year, nothing huge, and I don't currently pay for their Pro offering (£10/month seems too high).

Any other options?

If you're happy with the research & risks of trading then a S&S ISA would seem to be a sensible option for £20k per year which will give you more diversification and help offset the cash losing value to inflation

pokora

My advice would be:

"Dont put all your eggs in one basket".

eastmidsaver

there are a few options as many have advised above:

1. you can open another bank account.  it's not difficult, and gives that bit of peace of mind.
2. premium bonds like you doing.  the risk is you might win nothing, but with interest rates so low, might be worth it as if you max the £50k you will have a better chance of getting some prizes.
3. Pension - you get the tax rebate . and you are at an age where you could withdraw from it.
4. Stocks and Share ISA - as pointed out above.

overall, you're in a great position .  well done.