Temporary high balance advice

dancelikeamonkey

boingy said:

Looks like you can get 3.9% with Halifax (or 4% if you have the right current account) and it would certainly be the easiest option. The chances of someone like the Halifax getting into difficulty is vanishingly small and even if they did they would be bought by a rival or bailed out by the govt. You've more chance of winning the Lottery than losing the money in the Halifax (but buy a Lottery ticket when the house sale goes through ).

Ah, that Halifax one is paid monthly. Oddly it was buried under a load of far worse savings accounts they were offering when I logged in so I'd missed it 🙄

That's perfect, thanks so much for the help everyone. Really appreciated.

aroominyork

Premium bonds are a bad idea for a few months becasue you earn/stand to win nothing for at least a month. If you invest today or tomorrow you will be in the July draw (earing nothing during June); if you wait until Monday it will be the August draw.

If you understand nominal gilts, T24 matures on 7 September and at a price of 99.55 with a 2.75% coupon is paying 4.42%. If tax on interest is an issue for you, the capital gain (the difference between 99.55 and par 100.00) is tax free; you only pay tax on the coupon. For a basic rate taxpayer that means it pays a net 3.87%; in a savings account which is all taxed you would need a rate of 4.8375% to match that. And of course you can sell it before it redeems in September but you would take a small hit from the spread.

eskbanker

aroominyork said:

Premium bonds are a bad idea for a few months becasue you earn/stand to win nothing for at least a month. If you invest today or tomorrow you will be in the July draw (earing nothing during June);

If you deposit into a standard monthly interest savings account today or tomorrow, it'll be a month until any interest is paid too!  Granted, PBs aren't ideal if unable to time deposits and withdrawals optimally (so yes, early in the month isn't a good time to buy), but the 'missing month' argument ignores the fact that PB returns are essentially just paid in arrears, like other types of account.

aroominyork

eskbanker said:

aroominyork said:

Premium bonds are a bad idea for a few months becasue you earn/stand to win nothing for at least a month. If you invest today or tomorrow you will be in the July draw (earing nothing during June);

If you deposit into a standard monthly interest savings account today or tomorrow, it'll be a month until any interest is paid too!  Granted, PBs aren't ideal if unable to time deposits and withdrawals optimally (so yes, early in the month isn't a good time to buy), but the 'missing month' argument ignores the fact that PB returns are essentially just paid in arrears, like other types of account.

Yes, fair point. Depositing on 31 May and withdrawing on 1 July means you are in one draw. Thanks for the correction. 

dancelikeamonkey

I'm tempted by the premium bonds just in case I get lucky, but given the odds of getting anything decent plus what you've said about the timing i think I'll just cram all the cash into Halifax.

Thanks again everyone. As ever this forum has been so, so useful.

boingy

And your question about interest is that monthly or yearly makes no difference. Your interest is calculated daily and when you close the account you get the interest earned so far. If you withdraw most of it and don't close it you'll be paid the interest on that next month or year date but you don't lose out. 

badger09

A tangential point if I may. 

Unless you’ve already had an offer accepted on a house, you’d be very fortunate to complete a purchase within 3-4 months. So you might consider 6 month fix, or a  shorter Notice account. I’m not up to date with these but take a look @ the main website & other threads. 

Swipe

Based on my own and my late mother's experience, I wouldn't jeopardise a house sale/purchase at the hands of NS&I. As safe as they are, when things go wrong, they go badly wrong and they are extremely slow at dealing with any issues.