House sale and putting money into savings

gerdo

Hello all, we will be completing our house sale at the end of June and not buying anywhere immediately. I plan to put the money (320K) into easy access savings accounts (in 85K chunks) until we need it. I have a few questions about this

To prevent any fraud suspicions by my bank should I inform them that there will be unusually large amounts going in and out of my account ?

I've never opened one of these online, high interest accounts (e.g. Raisin or Chip) so how do they work? Do I set up the account and then transfer a small amount to confirm it all works? And are they safe enough as long as the 85K is FSCS protected?

I don't do a tax return, so how does the taxman know about the interest earned? Do the banks inform the taxman or do I need to?

Any other suggestions / things to watch out for will be appreciated

Thanks.

Albermarle

gerdo said:

Hello all, we will be completing our house sale at the end of June and not buying anywhere immediately. I plan to put the money (320K) into easy access savings accounts (in 85K chunks) until we need it. I have a few questions about this

To prevent any fraud suspicions by my bank should I inform them that there will be unusually large amounts going in and out of my account ? Different banks have different systems, even if you warn them it can still get blocked. Be prepared for a few chats with their fraud depts.

I've never opened one of these online, high interest accounts (e.g. Raisin or Chip) so how do they work? Do I set up the account and then transfer a small amount to confirm it all works? And are they safe enough as long as the 85K is FSCS protected? In fact most savings accounts are operated online nowadays, even if you are with a more traditional provider. Yes as long as they are a licensed UK deposit taker, you are covered.

I don't do a tax return, so how does the taxman know about the interest earned? Do the banks inform the taxman or do I need to? The banks inform HMRC and they  send you a tax bill /adjust your tax code at a later stage.
You have to fill in a tax return if the annual interest is more than £10K

Any other suggestions / things to watch out for will be appreciated

Thanks.

There is a temporary high balance protection for 6 months for money for house buy/sells.
Temporary high balances | Check your money is protected | FSCS

You are also safe with a high balance in NS & I , although the interest rates are not that great.
National Savings & Investments | 100% Secure Saving | NS&I (nsandi.com)

TheBanker

You should put in a bit less than £85k so there's room for the interest. 

Is this just your money, or is it joint? FSCS cover is per person, so you could open joint accounts to benefit from £170k of cover.

Band7

You will be limited by the max daily amount your bank will let your transfer - unless you use CHAPS or cheques, neither of which are accepted at all savings providers. Giving your bank a heads up beforehand won't disable their fraud checks (if this did, all fraudsters would inform banks before stealing people's money). Some banks have very low daily limits, others have more generous ones, sometimes depending on the payment method used. Who are you with?

Accounts are safe if they are FSCS protected but be sure you know who holds your money. For example, all your savings with CHIP are held by Clearbank. Clearbank is also Raisin's staging bank for deposits and withdrawals. Your total FSCS protection for funds held by Clearbank is £85k per person.

Savings providers will report the interest you earn to the HMRC. They will collect any tax due through your tax code. Or you can contact them and pay it as a one-off.

Beddie

Maybe £50k each into premium bonds, as they are tax free and the returns are reasonable, but not guaranteed! Also £20k each into ISAs.

Yes, I normally transfer a small amount first to the new savings account, but as others have said it can take a while to move it all. Different banks have different transfer limits, for example Barclays £10k per day via the app, but £50k via online banking.

You probably will get a flag from your bank at some point and have to talk to the fraud dept., but it's usually straightforward once they've asked a few questions about why and where you're moving the money.

gerdo

Thanks all, didn't realise that I could have a joint account with £170K in it and it would be FSCS protected. Although I noticed that al lot of the accounts I've been looking at do not allow joint accounts.