I've got £100,000 cash savings in my current account | Is Skipton Base-rate Savings the 1# choice?

Anonymous868
Anonymous868 Posts: 53
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edited 6 December 2023 at 1:20PM in Savings & investments
I've got just over £100,000 cash savings | Which for the past few years I've just left sat in my Barclays current-account (0% interest).
*I always thought/was under the impression that the maximum-limit interest was paid on was £1,000 - £2,500 (so would equal literally pennies per month) | Thus never bothered looking for today, when I saw an MSE email in my junk mail.

I've subsequently researched into it though, and seen that a few places offer 5%+ (on balances upto £1million!)

Thus my 100k = £430 net profit per every single month :: For doing literally nothing / Plus risk-free?!?


It appears to be a choice between:


In terms of my personal lifestyle & spending-requirements:

This 100k is just gonna be used towards getting a mortgage (most likely in 9-12 months time).
Ideally I want to save up a further 40-50k | Thus would only need to borrow 30-40k as my mortgage.

I've got a full-time job already, thus my income from that covers all my day-to-day living costs;
Thus the only time I would realistically need to touch the 100k in this account will be for my mortgage (towards Autumn 2024 at earliest).


I am currently leaning towards the Skipton account, as whilst it's £10 less profit per month on 100k balance, it is locked to the BoE rate for 2-years / (Wheras Paragon could just reduce their rate if they choose).


But I just wondered if there are any hidden dangers with the Skipton account that I'm overlooking, please?

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Comments

  • p00hsticks
    p00hsticks Posts: 12,579
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    Apart from anything else, it;s not recommended for you to keep more than £85,000 with any individual banking group. as this is the upper limit of the FSCS protection guarantee
    See how FSCS protects banks and building societies | FSCS
  • Mark_d
    Mark_d Posts: 282
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    Why would you keep £100k in a current account?  Aside from the lack of interest, FSCS protection might only cover for £85 of the bank failed.

    If I had £100k cash and wanted to use it for a house purchase in 9-12 months time, then I would keep some in a high interest current account (I use Kroo) and the rest in instant access savings accounts with different banks (paying at lest 4%).  For the savings accounts I'd also be considering what ISAs are available.

  • Tbh I very much doubted Barclays Bank will be allowed to go bankrupt by the government.
    (Although yes, I am aware that the additional 15k/or whatever over 85k would be at risk in that doomsday scenario)

    I have always used Barclays Bank as my main debit-card account, and so tbh I just liked being able to go to a cash-point and seeing 100k+ sat in my account. :)


    I have today discovered about accounts not being limited to paying interest on £1,000 max balances though...
    Thus realized how much free profit I can earn monthly from a high-interest account.
  • You should be aiming to earn min. 5% on your cash deposits. The Skipton base rate tracker would be a safe bet, but you can get more if you're happy to go with other less established banks. Metro are top ATM at 5.22% and Ulster bank 5,2%. You can get more by using a notice account, which could work out well with your timescale for the house deposit. I've user Hampshire Trust Bank and would recommend them. 

    Best savings accounts: 5.22% easy access or 5.8% fixed rates (moneysavingexpert.com)

  • ColdIron
    ColdIron Posts: 8,656
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    £100,000 in a current account at 0% is bonkers
    Given the FSCS threshold why not split it between the two?
    Your interest is certain to be taxed so look at £20,000 in an ISA, and again next April
  • I've got just over £100,000 cash savings | Which for the past few years I've just left sat in my Barclays current-account (0% interest).
    *I always thought/was under the impression that the maximum-limit interest was paid on was £1,000 - £2,500 (so would equal literally pennies per month) | Thus never bothered looking for today, when I saw an MSE email in my junk mail.

    I've subsequently researched into it though, and seen that a few places offer 5%+ (on balances upto £1million!)

    Thus my 100k = £430 net profit per every single month :: For doing literally nothing / Plus risk-free?!?


    It appears to be a choice between:


    In terms of my personal lifestyle & spending-requirements:

    This 100k is just gonna be used towards getting a mortgage (most likely in 9-12 months time).
    Ideally I want to save up a further 40-50k | Thus would only need to borrow 30-40k as my mortgage.

    I've got a full-time job already, thus my income from that covers all my day-to-day living costs;
    Thus the only time I would realistically need to touch the 100k in this account will be for my mortgage (towards Autumn 2024 at earliest).


    I am currently leaning towards the Skipton account, as whilst it's £10 less profit per month on 100k balance, it is locked to the BoE rate for 2-years / (Wheras Paragon could just reduce their rate if they choose).


    But I just wondered if there are any hidden dangers with the Skipton account that I'm overlooking, please?

    There are no hidden dangers with the Skipton. You could split your funds between Skipton and Paragon in order to stay within £85k FSCS protection limit.
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