Where to save 300K short term?

ruthlord

Moving to Scotland where you need ready money to even be considered for house purchase. House in England will soon be sold and we will rent short term. Can anyone advise the best place to save such a large sum for say 6 months while buying the next home? Needs to be safe but also protected from inflation as far as possible. 

Thrugelmir

No inflation protection available. House prices though are unlikely to rise in line with the broader measures of inflation. 

Linton

You wont get a return anywhere near inflation current inflation rates without taking the risk of ending up with less money than you started.  6 months is far too short a time to be considering taking on risk.

You can put the money in National Savings (NS&I)  where any amount is guaranteed by the government.  Large sums of money up to £1M in a bank account are protected for up to 6 months if they come from certain transactions such as selling your home which may or mnay not apply to you: see https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances.

As Thrugelmir says, house prices may well not be influenced  by the current rises in price of  day to day purchases.  Perhaps house prices will fall if poeope are worried about spending money.

ChilliBob

Max out easy access rates, chase being the start @1.5%. Then go for slightly lower. Yes, NS&I is the safest and easiest option, but paying 0.5%.

Splittong into 85k chunks isn't so bad on 300k

That's what is do anyway. Oh and whilst the return is less than best easy access you could always do Premium Bonds - you might strike it lucky and anything you do get us tax free.

It depends how much hassle you want to go for to get a few more quid. Sometimes in house purchase mode you just can't be arsed, I totally get that! 

Flugelhorn

agree re NS&I - money safe there and TBH not worth the chasing around finding multiple accounts for85K each.

jimexbox

Fscs covers upto a million for upto 6 months for specific reasons such as this. Obviously check if you'd been covered yourself... 

Exodi

Flugelhorn said:

agree re NS&I - money safe there and TBH not worth the chasing around finding multiple accounts for85K each.

I disagree.

NS&I's direct saver is 0.5% AER, which over the course of 6 months would pay £875 in interest.

If we compare that to splitting the money into 85k chunks and depositing in current top savings accounts -

Chase 85k 1.5% AER £637.50
Atom 85k 1.25% AER £531.25

Ford 85k 1.15% AER £488.75
Tesco 45k 1.11% AER £249.75
-----
£1907.25.

Just on this website name along, making an addtional £1k for 'chasing around finding multiple accounts' should still be advised.

Daliah

Agree with the principle @Exodi described.

If you want an easy life, you could also consider HL Active Savings, as you need to open only one account, and HL will then place your money into different accounts, as per your instructions. They also currently pay you a welcome bonus. Their rates aren't terribly exciting though if you are able to fix for 3 and 6 months, you can beat the instant access rates.

Albermarle

Same question is asked on a very regular basis 

Money for deposit, what to do with it? — MoneySavingExpert Forum
Large sum short term investment — MoneySavingExpert Forum
What to do with savings for a house? — MoneySavingExpert Forum

Exodi

Daliah said:

Agree with the principle @Exodi described.

If you want an easy life, you could also consider HL Active Savings, as you need to open only one account, and HL will then place your money into different accounts, as per your instructions. They also currently pay you a welcome bonus. Their rates aren't terribly exciting though if you are able to fix for 3 and 6 months, you can beat the instant access rates.

I think the HL Active Savings are a fantastic idea. A cursory glance at the 6 months savings products -

Aldemore 85k @ 1.6% = £680, Close 85k @ 1.6% = £680, Chase 85k @ 1.5%  = £637.50, Kent Reliance 45k @ 1.35% = £303.75, +£100 cashback from HL = £2401.25

That's £500 more than I said, and over £1,500 more than putting in NS&I.

OP will have to be quick though, many of them expire very soon!

janusd

if you were going to fix for 6 months (as per above post suggestion), then Shawbrook would be another option at 2% - possibly earning £850+ in interest.