Best options

luckybert

I've just sold my house and have £150k spare cash - my new property isn't ready until next year.
Basically I've got six months before I need my money again so I've put £75k in one easy access account (Chip 4.84% easy access) and 75k in another easy access account (Santander 5.2% easy access). Just wondering if I've chosen the best option?
My thinking was I can get to my money easily enough if my house build gets completed early and I'm protected as I've got less than £85k in the accounts.
I think I should be able to make £3.6k (180 days @ £10 a day interest x 2 accounts = £3.6k) roughly in each account in interest in the six months?

sausage_time

Are you a tax payer?  That may dilute what you get to keep.   

friolento

Unless you want to stick with easy access for all of your money, you could get better interest in Notice accounts or in 6-months fixes.

You might also be able to save a smidgen of tax if you can still use your ISA allowance. If you have a trusted partner, splitting the money between the two of you could further reduce the tax liability.

luckybert

So pay tax on money that I've already been taxed on? Yes please where do I sign up?

My reasoning behind not having a six month fix is in case my house gets completed early - unlikely I know.

ColdIron

luckybert said:

So pay tax on money that I've already been taxed on? Yes please where do I sign up?

You will pay tax on the money that you do not have yet, the interest

xylophone

See

https://www.gov.uk/apply-tax-free-interest-on-savings

friolento

luckybert said:

So pay tax on money that I've already been taxed on? Yes please where do I sign up?

Your estimated £3.6k interest is taxable new income which the banks pay without tax deduction. They do report the interest payments to HMRC, who add it to any other taxable income you have. There is a Personal Savings allowance of £1,000 for basic rate tax payers, and £500 for higher rate ones. Any interest above this allwance is taxable at your applicable rate.

So depending on your tax band, your tax for the interest would be either 20% of £2,600 (£520), or 40% of £3,100 (£1,240). Leaving you with either £3,080 or with £2,360.

luckybert

Also, are my calculations correct on earning £1.8k before tax? I expected to be earning a bit more @ 4.84%.
I seem to be getting £10 a day added with 75k in there.

Wheres_My_Cashback

If you're a tax payer, particularly higher rate an ISA would probably be better or even consider £50K in Premium Bonds.
No time restrictions with the right a/c.

luckybert

I am a tax payer (in the 20% bracket).

friolento

luckybert said:

Also, are my calculations correct on earning £1.8k before tax? I expected to be earning a bit more @ 4.84%.
I seem to be getting £10 a day added with 75k in there.

£75,000 * 4.84% = £3,630 pa / 365 = £9.95 per day

Whether 4.84% is the correct rate, I don’t know.