Putting High Amount Of Money Into Different Accounts

davejjt5

We are due a high 6 figure windfall in the next few months. Is it best to have different bank accounts and to put certain amounts into these accounts, I know keeping one with bank ( we two current accounts for my wife and I , savings account, ISA account with Santander) isn't a good idea incase the bank goes bust. Which other banks would you recommend to have to put into. 

Ayr_Rage

Any bank with FSCS protection and a decent rate, simple as that.

NanookOfTheNorth

NS&I has unlimited protection so that could be used as a temporary base for your money until you find something better/decide what to do with it.  As mentioned on the NS&I web site "Most banks only guarantee your savings up to £120,000. We’re the only provider that secures 100% of your savings above this amount."

https://www.nsandi.com/products

Shylock_249

It's a pity that NS&I don't allow transfer in ISAs, if they did I'd put the eight I have and the eight the wife has with different providers into one account each to avoid Probate when one of us dies.

I submitted a suggestion to the Treasury saying that I thought it would be a good idea to allow people of a certain age to merge their ISAs with their spouses so they could be held in joint names and in the event of one of them dying the bank would just need a copy of the death certificate and the account would be held only in the survivors name.  The bereavement teams in the eight banks I spoke to all thought it would be a good idea and would certainly make it easier for them and of course the surviving spouse.

eskbanker

davejjt5 said:

We are due a high 6 figure windfall in the next few months. Is it best to have different bank accounts and to put certain amounts into these accounts, I know keeping one with bank ( we two current accounts for my wife and I , savings account, ISA account with Santander) isn't a good idea incase the bank goes bust. Which other banks would you recommend to have to put into. 

When will you anticipate using the money?

If it's within six months, e.g. to buy a new property, then you may be covered by the FSCS Temporary High Balances provision, protecting up to £1m for up to six months in one account.

If it's many years into the future then investing some or all of it, either standalone or within pensions, may be advisable, to reduce the risk of real-terms value loss to inflation.

In between these options, splitting into multiple savings accounts (or one with NS&I) would probably be best.

If you need help with evaluating your decision, it may be worth discussing with one or more independent financial advisers....

davejjt5

eskbanker said:

davejjt5 said:

We are due a high 6 figure windfall in the next few months. Is it best to have different bank accounts and to put certain amounts into these accounts, I know keeping one with bank ( we two current accounts for my wife and I , savings account, ISA account with Santander) isn't a good idea incase the bank goes bust. Which other banks would you recommend to have to put into. 

When will you anticipate using the money?

If it's within six months, e.g. to buy a new property, then you may be covered by the FSCS Temporary High Balances provision, protecting up to £1m for up to six months in one account.

If it's many years into the future then investing some or all of it, either standalone or within pensions, may be advisable, to reduce the risk of real-terms value loss to inflation.

In between these options, splitting into multiple savings accounts (or one with NS&I) would probably be best.

If you need help with evaluating your decision, it may be worth discussing with one or more independent financial advisers....

We will be buying a property in a different county and probably a new car and try to live of the rest, we in our early 50's . Maybe work part-time.

GeoffTF

eskbanker said:

davejjt5 said:

We are due a high 6 figure windfall in the next few months. Is it best to have different bank accounts and to put certain amounts into these accounts, I know keeping one with bank ( we two current accounts for my wife and I , savings account, ISA account with Santander) isn't a good idea incase the bank goes bust. Which other banks would you recommend to have to put into. 

When will you anticipate using the money?

If it's within six months, e.g. to buy a new property, then you may be covered by the FSCS Temporary High Balances provision, protecting up to £1m for up to six months in one account.

The money has to come from a Qualifying Life Event.

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

A lottery win does not count, for example. Neither does shifting £1m from one of your accounts to another.

Kim_13

If the accounts are joint accounts then you would be covered for up to £240,000 in Santander indefinitely, e.g. £60,000 in sole accounts each and £120,000 in joint savings, as anything in a joint account is split 50/50 and so each person is at their £120,000 total. 

You could repeat that with a few banks/building societies, and as the total is significant £50,000 in Premium Bonds each is likely to be a good home for the money as winnings are tax free. Make sure you fully utilise your ISA allowances, whether in Cash or S&S, as you are likely to be paying tax on interest/gains otherwise. 

Family Building Sociey's Market Tracker Saver isn't a bad account to have in the current environment as they can only move the rate 4 times a year, one account each and again £240,000 would be covered.

Albermarle

davejjt5 said:

eskbanker said:

davejjt5 said:

We are due a high 6 figure windfall in the next few months. Is it best to have different bank accounts and to put certain amounts into these accounts, I know keeping one with bank ( we two current accounts for my wife and I , savings account, ISA account with Santander) isn't a good idea incase the bank goes bust. Which other banks would you recommend to have to put into. 

When will you anticipate using the money?

If it's within six months, e.g. to buy a new property, then you may be covered by the FSCS Temporary High Balances provision, protecting up to £1m for up to six months in one account.

If it's many years into the future then investing some or all of it, either standalone or within pensions, may be advisable, to reduce the risk of real-terms value loss to inflation.

In between these options, splitting into multiple savings accounts (or one with NS&I) would probably be best.

If you need help with evaluating your decision, it may be worth discussing with one or more independent financial advisers....

We will be buying a property in a different county and probably a new car and try to live of the rest, we in our early 50's . Maybe work part-time.

So as the previous poster indicated, the money needed short term ( to buy a house/car) should be kept in a safe savings account(s)
For money that you want to generate an income long term, then you should consider investing it, maybe via a pension.
The amount of money people need to sustain a good retirement long term, is often very much underestimated.

eskbanker

GeoffTF said:

eskbanker said:

davejjt5 said:

We are due a high 6 figure windfall in the next few months. Is it best to have different bank accounts and to put certain amounts into these accounts, I know keeping one with bank ( we two current accounts for my wife and I , savings account, ISA account with Santander) isn't a good idea incase the bank goes bust. Which other banks would you recommend to have to put into. 

When will you anticipate using the money?

If it's within six months, e.g. to buy a new property, then you may be covered by the FSCS Temporary High Balances provision, protecting up to £1m for up to six months in one account.

The money has to come from a Qualifying Life Event.

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

A lottery win does not count, for example. Neither does shifting £1m from one of your accounts to another.

It doesn't necessarily have to come from a qualifying life event, hence the wording about "your account has a temporary high balance because of a qualifying life event", rather than 'from' as such, and it does include the purchase of a home rather than just the sale ("Real estate transactions (property purchase, sale proceeds, equity release. This doesn't have to be a UK property but must relate to your main residence)").

OP does refer to a large "windfall in the next few months", although doesn't expand on the source (and is under no obligation to do so of course), but yes, you're right to highlight the rules, despite the above challenge about what they actually say!

GeoffTF

eskbanker said:

GeoffTF said:

eskbanker said:

davejjt5 said:

We are due a high 6 figure windfall in the next few months. Is it best to have different bank accounts and to put certain amounts into these accounts, I know keeping one with bank ( we two current accounts for my wife and I , savings account, ISA account with Santander) isn't a good idea incase the bank goes bust. Which other banks would you recommend to have to put into. 

When will you anticipate using the money?

If it's within six months, e.g. to buy a new property, then you may be covered by the FSCS Temporary High Balances provision, protecting up to £1m for up to six months in one account.

The money has to come from a Qualifying Life Event.

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

A lottery win does not count, for example. Neither does shifting £1m from one of your accounts to another.

It doesn't necessarily have to come from a qualifying life event, hence the wording about "your account has a temporary high balance because of a qualifying life event", rather than 'from' as such, and it does include the purchase of a home rather than just the sale ("Real estate transactions (property purchase, sale proceeds, equity release. This doesn't have to be a UK property but must relate to your main residence)").

OP does refer to a large "windfall in the next few months", although doesn't expand on the source (and is under no obligation to do so of course), but yes, you're right to highlight the rules, despite the above challenge about what they actually say!

You are right, of course. I had not noticed property purchase. If the OP won his windfall in a lottery and uses the money to buy a primary residence for himself, that would be covered. The other events listed are all about money coming from a qualifying event. The link also makes it clear the the list given is not exhaustive. I have not listened to the podcast. Anyone who wants to rely on this protection would be well advised to check the rules carefully.