What do do with £100k for a short term investment?

Barking_Dogs

I've got £100k from the sale of a house.

I've got a mortgage on my residential property (£200k outstanding) on a rate of 1.24% which runs until May 2023.  I can make a 10% overpayment each year which means I can pay in approx £40k (2 payments).  At such a low interest rate, can't help thinking it would be better not doing this and investing the whole lump sum for a better return.  Even if I do, it still leaves £60k to play with.

My goal is to put my home on the market at the end of the term, sell it and buy another property using the combined proceeds of the sale and the lump sum.

I gather the stock market isn't a good prospect for such a short term investment so I'm a bit stuck on what to do with it other than making the mortgage overpayments and then damage limitation with some kind of cash savings account. 

Anyone got any better ideas?  

lozzy1965

50K in premium bonds for short term, and as you say, pay down the mortgage if you are going to sell and buy a bigger house soon anyway.

maxsteam

Consider premium bonds (up to £50k per person). They average 1% per year which is slightly less than your mortgage rate.

A large, mainstream fund could gain or lose 1% in a day. This may be good or bad. It's the volatility that may make it unattractive to you. For everyone who says prospects are bad, there's someone else who says that prospects are good. You can make up your own mind.

Barking_Dogs

Hadn't even thought of premium bonds.

I've thought abut putting it into a fund - maybe maxing out my ISA allowance over 2 tax years.  But I wouldn't want to be forced to ride out any downturn. 

Albermarle

Barking_Dogs said:

Hadn't even thought of premium bonds.

I've thought abut putting it into a fund - maybe maxing out my ISA allowance over 2 tax years.  But I wouldn't want to be forced to ride out any downturn. 

The usual advice is the absolute minimum period for investing is five years , otherwise the risk of it being lower when you want to take it is too high . Ideally should be > 10 years.
If you need it in two years then best to save it in safe savings account /premium bonds .
Compare The Best UK Savings Accounts | moneyfacts.co.uk

GeoffTF

You can get 2.1% on a five year savings account:

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

That is 1.68% after standard rate tax.

msallen

GeoffTF said:

You can get 2.1% on a five year savings account:

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

That is 1.68% after standard rate tax.

Considering the OP wants access to this in something a little over 16 months time that's not particularly useful.