Where to stash £500k+

randompenitent

We're close to selling our house but probably a few months away from buying the next one. Where would forumites recommend saving the sale proceeds in the interim?  I'm thinking of National Savings Income Bonds. Completely safe (if says here), deposits up to £1M, instant access, monthly income.  OK, so the interest rate isn't the greatest ever  (4.0% AER and likely to fall soon) but this isn't a long-term investment. 

Any better ideas?  Am I missing something obvious?

wjr4

https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/

wmb194

randompenitent said:

We're close to selling our house but probably a few months away from buying the next one. Where would forumites recommend saving the sale proceeds in the interim?  I'm thinking of National Savings Income Bonds. Completely safe (if says here), deposits up to £1M, instant access, monthly income.  OK, so the interest rate isn't the greatest ever  (4.0% AER and likely to fall soon) but this isn't a long-term investment. 

Any better ideas?  Am I missing something obvious?

NS&I is the obvious one. Otherwise spread it around and/or take advantage of the FSCS temporary high balance coverage if you fit its criteria.

https://moneyfactscompare.co.uk/savings-accounts/

PloughmansLunch

If going for NS&I and need to access it in the near future you'll have to cancel the bond then reapply every month to prevent it being locked away for a year. Ignore my nonsense

ColdIron

PloughmansLunch said:

If going for NS&I and need to access it in the near future you'll have to cancel the bond then reapply every month to prevent it being locked away for a year.

Not with Income Bonds, they are easy access. You would with Guaranteed Income Bonds though

https://www.nsandi.com/products

PloughmansLunch

ColdIron said:

PloughmansLunch said:

If going for NS&I and need to access it in the near future you'll have to cancel the bond then reapply every month to prevent it being locked away for a year.

Not with Income Bonds, they are easy access. You would with Guaranteed Income Bonds though

https://www.nsandi.com/products

Oh, I didn't realise they existed - the 'bond' misnomer threw me. I'm still kicking myself for not cancelling/refreshing my own GIB a couple of times as I missed out on the 6.2% issue last year.

ColdIron

Yes and the alternative (and additional) name of 'British Savings Bonds' for both the Guaranteed Growth and Income Bonds doesn't add any clarity. Altogether too many 'bonds'

cwep2

One alternative is Virgin Money Private savings.

Given you should be covered by temporary high balance rules the £85k FSCS is extended to £1mio (for 6 months) so no worries about putting it all in one place.

This pays BoE base rate for £500k+ so currently 5.00% gross (quarterly) which equates to 5.09% AER. Now there is a £15/month fee which takes your AER after fees to 5.08% on exactly 500k. Only Ulster Bank pays more than this but that is falling to 4.75% on 14th October. Assuming BoE doesn't cut rates tomorrow (19th Sep) then next meeting is 7th November. Even if they drop 0.25% at some point this account will return 4.82% AER, beatable now (just) but I wouldn't be surprised to see the others cut in that eventuality too so may still be top available rate. 

Below 500k balances it pays base rate -0.25% so for those who don't want to risk not having FSCS protection this is not the best available rate, but for those who have £500k+ with either temporary FSCS protection or happy to risk it with one of the UKs biggest clearing banks this is an alternative. Most people on this forum are absolutely wedded to not going above FSCS protected amounts, so this account is rarely mentioned here. 

randompenitent

I didn't know about the Virgin Money Private Savings account.  Sounds worth investigating.  Thanks.

Ciprico

See the latest pensioncraft podcast

Ramin covers this subject

https://open.spotify.com/episode/6lR6kNBQRDv8H0TS1M55Zh?si=QtCTRdKNQjadvRxaCDbkWg

Swipe

If you are going with NS&I I'd go with a direct saver which pays the same rate as income bonds.