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Help me with this large sum of money?

(16 Posts)
WhatEverItIsIDidntDoIt Tue 11-Dec-12 12:02:52

I need advise, I have just come into a large amount of money and I don't know where to put it. At present it is sitting in my current account which even I know this is not the right place for it!

So what would you do? Where would be the best place to keep it? I am planning on using it for a deposite for our first home within the next 12-18 months but until then i'm starting to panic as I have never handled such a large sum of money.

MrsHoarder Tue 11-Dec-12 12:09:07

Over that short a time period you want it in a savings account (possibly a 1 year bond if you definitely won't need it for 12 months), with no more than 85k in any one bank. Just use a comparison site to get the best possible interest rates and make sure that they are protected by the FSA (most British high street banks/building society accounts are).

WhatEverItIsIDidntDoIt Tue 11-Dec-12 12:46:16

Thanks for the above, i'll check money supermarket or something similar.

That's where I got those from.

Don't put more than £85,000 in any one bank (and some banks are owned by the same parent company), try to get an account which pays monthly interest and use your ISA allowance. Also make sure they are instant access accounts (if that's what you need).

Make sure you take some ID and proof of address with you when you go to open your account ie passport/driving licence and electricity bill, as they need proof of you and proof of your address.

MrsHoarder Tue 11-Dec-12 13:01:06

Monthly interest isn't important if you don't need an income from it: most accounts have interest calculated daily and added on account closure.

specialsubject Tue 11-Dec-12 15:29:50

first, use all your cash ISA allowance for this year if you haven't already.

try this link for some rates - updated regularly BUT you also need to search every financial institution that you can think of.

www.thisismoney.co.uk/money/saving/article-1583859/Best-savings-rates-General-savings--Internet-branch.html

rates are terrible at the moment so you need to do some heavy shopping around and make sure the rates are fixed for a duration - make a diary note to take action as otherwise you can find that they are happily paying you 0.01%.

As pointed out, if it is more than £85000 it must be split between different banking licences - for instance, Lloyds and Cheltenham and Gloucester are the same licence. Talking of which, Lloyds do a Vantage current account which pays 3% before tax on up to £5000. You need to have £1000 a month going in but it can be the same money going in and out.

shift it ASAP, even at the moment every day it sits in a zero interest account costs you a few quid in lost interest.

SantaFrontPaws Tue 11-Dec-12 15:35:01

I would go for a notice account. The interest will be better and you won't be temped to 'dip' into it. If you are not going to use it all for the mortgage, maybe consider keeping some liquid and offseting it against the mortgage. Sadly these days, its a good idea to have an easily accessible pot of cash.

ladydepp Tue 11-Dec-12 15:37:04

Check your bank first, they , they might have a decent rate on a savings account. (Lloyds does for example). Then you can link to your current account and you don't need to do so much form filling to open the account.

Coventry building society have some good rates and excellent customer service IMO.

As others have said, spread the money if you have more than 85k. And use your Isa allowance up first before you move the remainder.

Enjoy it!

MerryChristMoose Tue 11-Dec-12 15:41:00

If there's plenty, have you considered Premium Bonds? We borrowed £30k to fund an extension and kept it in bonds until we needed to pay a bill, then cashed some in as appropriate. We won every month whilst we had them.

I'm surprised your bank hasn't phoned you to tell you all the wonderful products they have available!

If it's a really big sum of money and you have no morals then get financial advice and put it in an offshore account.

TalkinPeace2 Tue 11-Dec-12 15:56:42

Another vote for ISAs - this year and every year, yours and DHs and your kids if you have

for the money you will pull back down : term deposits are the very best bet
returns on Premium Bonds were slashed at the start of the year

specialsubject Tue 11-Dec-12 16:18:24

worldgonecrazy is probably kidding - but you are perfectly entitled to use an offshore account if you declare it and pay the tax every year. There have been a lot of crackdowns on this and you are unlikely to get away with not paying the tax. which would of course be a crime.

Changeforthrday Tue 11-Dec-12 21:20:35

I would speak to an IFA. They've never advised me to go offshore haha! ISAs are good, so are bonds. Make sure if you tie up the money, you can get your hands on it if needed without huge penalties.

CogitOCrapNotMoreSprouts Thu 13-Dec-12 07:01:15

Assuming you have no debts or credit card balances (which you'd obviously pay off first) I'm going to echo the advice to put as much as possible into Cash ISAs to begin with. That's currently £5640 per adult, per tax year (April to April). So you could deposit your maximum allowance today and then do the same again after April 6th. As you say you'll need the cash within 12 - 18 months many Cash ISAs are instant access.

The next best option, I think, would be to put most of the remainder in a month fixed rate bond. The interest is taxable but the rates tend to be better than an ordinary deposit account. When the bond matures in 12 months you can again make use of your Cash ISA allowance.

Finally, I'd suggest putting the equivalent of 2 or 3 months bills into a simple deposit account at the same bank as your current account as a 'rainy day' fund. Always good to have some spare cash to draw on for emergencies. If the large sum of money is over £50k you might benefit from some independent financial advice.

CogitOCrapNotMoreSprouts Thu 13-Dec-12 07:02:23

One Year Fixed Rate Bonds (link didn't work properly)

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