Best savings with £200k

heronbommie

I’m looking to place £200k into savings using ISA and fixed rate savings between two of us. 

Married and I’ll be using my better half’s tax allowance on savings (no income) to max out the tax free income per year. Will be drawing the interest whenever it’s available, monthly or annually on the fixed savings and moving 40k every year into ISA. 

This tax year will soak up £40k into Virgin ISA or Close Brothers one year fix ISA. Same in April ‘24. 

I was going to put the rest into NSI 1yr fixed bond but that’s gone.

So my question is where would YOU put £160k under these circumstances. Don’t need access as a DB pension will cover expenses.

Thankyou

Bigwheels1111

No need for ISA'S unless you want to split the interest.

Your wife can get £18,570 of tax free interest a year with no earnings.

These are the top 5 year fixed accounts that allow interest to be paid away each year.

Gatehouse bank  5 year fixed rate 5.50% on 80k = £4,400

United trust bank 5 year fixed rate 5.40% on 80k = £4,320

BLME                  5 year fixed rate 5.38% on 40k = £2,152

This is if you have an emergency fund already in place.

A total of £10,872 a year tax free.

A self assessment return would need to be filed as interest would go over the 10k limit, very easy job.

https://moneyfactscompare.co.uk/savings-accounts/fixed-rate-bonds/

Select how many years and the rate order.

Then view further details, check compounded or paid away.

I know the FSCS protects 85k, but would not pay any interest owed above 85k

Thats why I use 80k as a limit to cover everything.

Albermarle

It is a lot to hold in cash, depending on your exact situation, when you will need the money etc., you should possibly consider investing some of it.
The reason is that over the long term cash usually has a negative real result, in that inflation is higher than the interest you gain. Whilst investments usually beat inflation over the long term. 
In recent times and maybe even for the next year or two, cash has been beating investments, but that will not last forever. A mixture of cash and investments is usually a good way to hedge your bets.

heronbommie

Thanks for the suggestions, not really looking for investments as we will be dipping into the funds in 3-10yrs so will be looking at savings.

We have a decent emergency fund.

This isn’t cash to keep for the long term or for inheritance purposes, it’s cash to get the best short term return and then use. Close Brothers is tempting with 1yr, 2yr, 3yr fixes at 5.85, 5.8 & 5.7%.

Will check the 5yr rates and will spread it to cover the £85k protection.

Might stick it in easy access until NSI come up with there next bond rates.

nickj62

This is a strange coincidence. 

My wife and I will soon be in a very similar situation due to an inheritance. She is not working and we will have about £150k to invest.
I work part time and also have a DB pension so outgoings are covered. 

We also want to invest in a fixed rate return for probably 2/3 years as my wife has pensions options at that time. 

Forgive my naivety but what is the benefit of transferring to an Isa if the interest amount on our investment is below my wife's annual tax free amount?
We have banked with Nationwide all our married life and we're thinking of just using their 2 year 5% fixed term account initially. 

ColdIron

heronbommie said:

Might stick it in easy access until NSI come up with there next bond rates.

I wouldn't hold your breath. It may never be repeated

• Highest ever interest rate for Guaranteed Growth Bonds and Guaranteed Income Bonds since they first went on sale in 2008

https://nsandi-corporate.com/news-research/news/nsi-offers-highest-ever-interest-rate-one-year-fixed-rate-guaranteed-growth

heronbommie

nickj62 said:

Forgive my naivety but what is the benefit of transferring to an Isa if the interest amount on our investment is below my wife's annual tax free amount?
We have banked with Nationwide all our married life and we're thinking of just using their 2 year 5% fixed term account initially. 

I suppose I was looking to have something in my name and also spread any returns, but my naivety will be equal to or greater than anyone’s.

ossie48

We're in the same situation roughly. Wife a non earner, pensions all sorted (early retired both 50s)

£220k from an Inheritance so in the first instance have put £125k into NS&I @6% and the rest in a Santander e saver.

We also have £150k in VLS60's I guess we should keep adding to them !

handful

For a similar reason I put £20k into a fixed saver account in my OHs name with Ford Finance a few weeks ago, 6.05%. Not sure if it's still available?

Another consideration for "safe" investment is a short term money market fund like Royal London's.