What To Do

Cammywatson033

Hi Guys,

Just sold my house and have about £85000 sitting in my account that will be there for the next 2 months until we need it to buy our new house. Any idea on the best way to try make some money off this amount without being risky?

Thanks 

jimjames

Best instant access acount, around 4.6%

Albermarle

Comparison chart for easy access accounts
Best Easy Access Savings Accounts | Rates Up To 4.60% (moneyfactscompare.co.uk)

Cammywatson033

Thanks guys, can I just pay the full £85k into these accounts upon opening?

Doctor_Who

Cammywatson033 said:

Thanks guys, can I just pay the full £85k into these accounts upon opening?

Yes, but your account may have transaction/daily limits on transfers, meaning you may have to do several transfers. 

Cammywatson033

Can i ask what might be a stupid question. So If I put £85000 into an account with 4.6% AER then after I withdraw it in say 2 months time I would will be paid about £650 interest? 

EthicsGradient

Cammywatson033 said:

Can i ask what might be a stupid question. So If I put £85000 into an account with 4.6% AER then after I withdraw it in say 2 months time I would will be paid about £650 interest? 

Yes, that's the amount of interest; if you choose an account paying monthly, you'll get about £325 each month. If it pays annually, and you close the whole account after 2 months, you'll get it then; if you leave the minimum in, the interest won't be added until the anniversary (or on a specified date, which a few use, eg 31st December).

Cammywatson033

Thanks for all your help guys 

Cammywatson033

One last question, I live in Scotland and I am a higher rate tax payer. Would I have to pay tax on my 2 months interest?

jimjames

Cammywatson033 said:

One last question, I live in Scotland and I am a higher rate tax payer. Would I have to pay tax on my 2 months interest?

It depends what other interest and income you have but generally as a higher rate taxpayer you'd be able to earn £500 interest per year tax free so the extra £150 would be taxed 

Doctor_Who

Cammywatson033 said:

One last question, I live in Scotland and I am a higher rate tax payer. Would I have to pay tax on my 2 months interest?

I live in Scotland too! The personal savings allowance is calculated using UK basic/higher rate tax bands and not the Scottish tax rates/bands. Hence, if your income is greater than £50,270 you will only have a £500 PSA (below this it is £1000). So, you can be a higher rate (42%) tax payer in Scotland and still have the £1000 PSA, since the 42% rate starts at £43,663. Any interest over the PSA is taxed at UK rates of 20/40%.

https://www.litrg.org.uk/tax-guides/tax-basics/what-tax-rates-apply-me#toc-how-does-the-personal-savings-allowance-work-