Where is best to save/invest share of equity from house

NuSnglMom2

Hi,
I am wondering where is best to save/invest my share of equity from house.  Would be over the £85k that is protected, so not sure how that works also for tax purposes?  Do I put £85k into 1 saving/investment account & then rest of equity into another?  Or am I better off putting full amount into 1 Savings/investment account? Would be ideally for 12-18 months.

Albermarle

The £85K is the max compensation you get if the bank goes bust.
The tax on interest is unconnected. 

See very similar thread running today.

Large amount of money safe for short duration — MoneySavingExpert Forum

NuSnglMom2

I don't believe I am talking about as much money as the person on the link you provided, and also I am looking at a longer term for saving/investment.  That link, the requirement is only for 6 weeks.  I am looking to find out what is my best savings or investment option.

TheBanker

As you have said 12 - 18 months, investments would not be suitable as they are for a longer term (10 years+). You could lose a lot of money if you only invest for 12 months.

So you are looking at Savings accounts. For the best rates you could look at fixed term savings for either 12 or 18 months, or a mixture.

You are limited to £85k compensation if a Banking Group collapses, so the general view is that you should split your money between different Banking Groups in order to stay within the limits. Some people recommend limiting your initial deposit to £80k so there's room for the interest to be credited.

In terms of tax, it depends. Are you currently a taxpayer on other income (e.g. employment or pensions)? 

Albermarle

NuSnglMom2 said:

I don't believe I am talking about as much money as the person on the link you provided, and also I am looking at a longer term for saving/investment.  That link, the requirement is only for 6 weeks.  I am looking to find out what is my best savings or investment option.

As above, 18 months is far too short a time for investing, so you are looking at savings accounts.
Here is a comparison chart for lots of different ones.
Compare The Best UK Savings Accounts (moneyfactscompare.co.uk)

NuSnglMom2

Brilliant, thank you.  I am basic rate tax payer.  

Albermarle

NuSnglMom2 said:

Brilliant, thank you.  I am basic rate tax payer.  

If you earn more than £17570 a year, then you can only earn up to £1000 tax free interest per tax year. Anything above that will get taxed at 20% ( not immediately but at some later stage when HMRC have all the info from the providers)

If you save via a Cash ISA savings account ( also in that link I sent you) the interest is tax free, but you can only add a maximum of £20K per tax year.

Bigwheels1111

If you put 81k in an account paying 5%, you would get £85,050 back only risking £50.
On 85k you would risk £4050.00.

Tassie_Devil

If you'd prefer to have it all in one account, NS&I guarantee 100% of everything you invest, but their rates are not the best.

https://www.nsandi.com/get-to-know-us/security/protect-your-money