where to save my house deposit

linkup

I am selling my house and haven't found another one to buy yet. I am thinking of renting until I find the home I want. Where can I put my deposit money (around £180,000) to optimise the interest rate but still use the interest to pay monthly rent?

Ian_W

Check out the Savings section of the site. You can use moneysupermaret or one of the others to give you the best paying accounts.

If you haven't used your 2005 allowance I'd put £3k [each if you're a couple] in a cash ISA and leave it alone until you need it - no tax to GB!

Best onliner saver [non-ISA] last time I looked was ICICI bank at 5.4% gross, interest paid monthly, but since they opened their HiSave account a couple of months ago they were so far above the rest, they've been inundated and their admin couldn't cope [more on Savings forum]. I've put some money with them and apart from being slow to open the account everything else has been fine. They're an Indian Bank [2nd largest] but fully secured with FSA in UK.

If you're not happy to go with them I'd go for one of the best buys that pays monthly interest. ING is competitive and seems pretty well regarded by customers. From memory some [1st Direct is one, I think] don't pay interest if you withdraw during a month so these would be a NO/NO if you're paying your rent from the interest. Other points to watch for are time limited introductory "bonus" interest which is OK if you don't mind moving when it's ended and whether you want/need Branch, postal, phone or internet access.

As you've just moved house you may have 1 or 2 hoops to go through due to money laundering regs - but that probably applies to all accounts.

Nice problem - what to do with £180k :j !!

linkup

Thanks for the pointers Ian. They've been really helpful. I've looked at the options and will be doing the full ISA quota and probably the ICICI Hi-save account. I do have a couple of other questions though.
Is there a way of getting around the tax on the savings over and above the ISA amount?
Is there a good online savings calculator that will show me how much I will get on a monthly basis net of tax?

Mike

Ian_W

Linkup wrote: Is there a way of getting around the tax on the savings over and above the ISA amount?
Is there a good online savings calculator that will show me how much I will get on a monthly basis net of tax?

Hi Mike,
1. There is a further ISA allowance of 3k - I think - but has to be equity [shares] based so involves risk :eek: [even if only slight] and wouldn't be advised for your deposit. You could keep it in a sock under your bed and count it every night - no interest = no tax . If you find any other please let me know - but as it would be a bandwagon with loads on board, I don't think so.
2. Not looked for one myself - try moneyfacts, moneysupermarket etc on the savings page.