Where to 'park' money

Oska12

I will shortly be receiving an inheritance around 40 to 60 thousand pounds and I am looking for an account to park it in short term. I currently have a cash ISA but its already maxed out for this year, I don't want to put it into a stocks and shares ISA. The reason is, once its received and our current abode is sold, we intend to use the inheritance and the sale money to buy another home. So an account where we can withraw it in full at short notice is what I'm looking for. The account doesn't have to pay interest, I'm not that bothered bearing in mind it would be in the account less than 6 months, I also don't want to use my HSBC accounts either.

masonic

If you've already used your ISA allowance, a S&S ISA would be off the table anyway.

You will be looking for the highest paying easy access savings account. See the article on the main site: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/ or Money Facts: https://moneyfactscompare.co.uk/savings-accounts/easy-access-savings-accounts/?quick-links-first=false&product-favorites-first=false&sort-order=AER&sort-order-text=Rate

Seems like you have some options paying 5% over the short term. I would not turn down the opportunity to earn £1k before tax by putting it in a non-interest paying account.

vacheron

https://forums.moneysavingexpert.com/discussion/6672571/where-to-park-money

Chase bank do an account that is very easy to open and offers 4.5% for the first year, instant access. FSCS protection will cover you for £120,000 so no need to try and span multiple accounts.

You say you're not bothered about interest, but interest on £60,000 for 6 months would be £1,350… so I would personally be bothered! 😉

You may have to pay tax on £350 of that interest if you are a basic rate taxpayer, (or £850 if higher rate), so consider splitting the funds between you and your spouse if you have one.

Newbie_John

As above or Premium Bonds.

Aylesbury_Duck

Put £50k in premium bonds and the rest in the best (highest interest) instant access account you can find. Best time to put money into premium bonds is the end of the month, so if you receive the money at the beginning of July, stick it all in the savings account and buy the premium bonds at the end of July.

Section62

https://forums.moneysavingexpert.com/discussion/comment/82035354#Comment_82035354

For something more long-term I'd consider Premium Bonds, but for "less than 6 months" the potential to miss out on two draws if the timings work out badly means needing a lot of luck to do better than a mundane savings account.

Newbie_John

https://forums.moneysavingexpert.com/discussion/comment/82035405#Comment_82035405

See, I wouldn't consider them for a longer term. 6 months is great, give it a go, you may get 6% back, you may get 1%, most likely end up close to 3% - but you've tried and may not regret you haven't :)

It provides all things that OP needs - easy access, very safe, no risk to initial capital, and can be benefitial from tax point of view.

InvesterJones

I wouldn't do premium bonds - a short duration and possibility of deposit/withdrawal at sub-optimal times means you're unlikely to get the prize rate advertised (unless you're very lucky).

Easy access accounts as posted by masonic are a solid option.

Section62

https://forums.moneysavingexpert.com/discussion/comment/82035413#Comment_82035413

The NS&I Direct Saver gives all those (except the tax benefit) and pays 3.45% gross - guaranteed unless the rate goes down.

Premium Bonds also require careful management at withdrawal time if that is likely to be near the end of a month. Unless you are careful, NS&I can delay the payment until after the next draw. If the solicitor handling the purchase wants cleared funds in their client account by a certain date around the month start/end then the NS&I delay needs to be known about and handled correctly.

Given the OP seems OK with the loss of possibly >£1000 in interest, adding the Premium Bond withdrawal complexity for the gain of (maybe) £25 or £50 in prizes isn't something which necessarily makes sense. Buying property is stressful enough as it is. Obviously if they were likely to win one of the big prizes then the risk/reward could be a little different.

friolento

https://forums.moneysavingexpert.com/discussion/comment/82035448#Comment_82035448

Premium Bond withdrawal isn't complex.

1. in NS&I online banking, transfer some or all of your PB money to your NS&I Direct Saver (which is easy and instant to set up, has a min balance requirement of £1). This transfer is instant.
   
2. withdraw from Direct Saver. They pay out next business day

The only thing to bear in mind is to remember all your security details for NS&I, but that's no different really to any other online account.

Section62

https://forums.moneysavingexpert.com/discussion/comment/82035551#Comment_82035551

Not "complex", but a "complexity" people need to be aware of if they want to be able to withdraw money on a specific date close to the end of a month.

You've described the 'mechanical' process for withdrawing by the quickest method, but overlooked or not mentioned the bit in the T&C's which say - "If you apply to cash in your Premium Bonds in the last two working days of a month, we’ll usually delay the cashing in so your Premium Bonds are entered into the next month’s draw. We do this to allow us to finalise the numbers of eligible Bonds for the draw."