AIBU to keep my inheritance in one bank account because of interest rate or am I naive

[JessicaRabbit23]

More ‘am I being naive’ to put all my inheritance into chase bank because the interest rate is so good. Money will be gone in August I after I buy a new house. I know you are only protected up to 120,000 but do big name banks go bust and surely we would get warnings……

It’s only protected up to a certain amount. If over that it’s far safer to spread it over accounts with different banks.

Yeah £120k

Recollections may vary on the need for TARP money, and it is true that the US Government needed them to take it to ensure others followed...And also underwrote the forced take over of Bearns and a couple of other smaller, failing banks to the tune of, from memory, $30 or $40 billon. But if they hadn't done that or taken the money, and others then hadn't either, the system would liley have spiralled closer to the point of collapse and they too would have then needed it, at which point the cost of saving everyone then would have been stratospheric. So one could take the view that them taking it early was part of what then stabilised the system, meaning they didn't need more later. Three or four years down the line, once the dust had settled, their CEO claimed that they hadn't needed it and shouldn't have taken it...but one also could take the view that was him distancing himself from the very systemic failings that took them all to the brink.

But I do agree that a world in which JPM goes under we have bigger problems!!

JP Morgan is a G-SIB. The likelihood of the US government (or governments) allowing them to fail is very slim

If the money is only going to be there a short while I would not worry.

If you plan to spend it by August, ISAs, S&S ones especially, are not appropriate.

How much over the 120 are you?
The chances of a bank going bust without warning is very slim. So it depends on the amount ££ involved and your attitude to risk.

There are a large number of potential inheritees on here who don't care much about their parents' welfare because ££££

It's 1000 pound for most people not 500. Most people don't earn enough to be in the higher tax bracket.

I would move anything over the guaranteed amount into another account.
It's a small risk of the bank going bust but it's still a risk. And places that have been considered very safe have sometimes turned out not to be

Worth repeating

I earn over the threshold in interest in a savings account. I currently do tax returns due to previous freelance work but all my work is PAYE now. If I apply to opt out of doing a tax return, does anyone know how my tax will be deducted for the interest?

It's done through your tax code.

Thanks for replying. I thought the banks had stopped reporting figures to HMRC or am I wrong?

NS&I savings account. Pays ok interest and you are protected up to £2m

https://www.gov.uk/apply-tax-free-interest-on-savings They do report- see here under "if you're employed"

FSCS protection is not for 'if it gets nicked'. It kicks in if the financial institution fails.

It will come off via your PAYE

I get a tiny pension: all my dividend and savings tax is taken off there.

You legally have to declare it though.

Sorry that's what I meant. Nicked by the bankers.

No. Debts being called in is not stealing.
Words have meaning.

Is Chase interest that good? It’s where I have my current account and a small amount of everyday savings, but most of my savings are in Chip and Trading212 getting more interest/in a cash ISA

Well if I put my money in the bank and it's gone it's because of what they chose to do with it/spend it on. I don't have any debts so why should I suffer because someone else can't pay? I entrusted my money to the bank and it's gone. There's not much meaningful difference between that and stealing in my view.

Your view is simply inaccurate. Banks fail for lots of reasons: some of which have zero to do with their decisions.

You are more than welcome to keep it under the mattress, so no-one can steal it from you.
But then you will suffer from inflation - your money is worth less than it used to be.
So you put it in the bank, who pay you interest on it, so the value of your money does not depreciate. They give you free money. In return for this, you allow them to use your money as they see fit, in order to pay for the money they are giving you. They have many many risk controls that mean that they should be able to return your money when you ask for it, but there is inherent risk in this. If you think "putting money in the bank" means that is untouchable sums of money... that is the mattress.

Yes you are wrong. HMRC are able to gather information from more and more places. I work in tax and honestly it's scary what they know about people. We think cryptocurrency is going to be their next target in terms of catching people who haven't paid the correct tax.

The Trust was drawn up 23 yrs prior and my parents didn't even think they'd be going into care let alone which one, private, LA or whatever. This wasn't the reason they had the trust initially. As it happened Mum 23yrs later following Dads death got placed directly from hospital discharge into a BUPA care home which is a LA funded home and wasn't means tested because it was obvious she could self fund, which she did until her death. The trust was drawn up in 2003 to leave dependants as much of their hard earned money as possible. That's not unreasonable and what most people do under the circumstances. If Mum had of exhausted her savings up to the 22.5k limit or whatever it was, the LA would have stepped in to fund it. They wouldn't have classed it as deprivation of assets because how on earth could they prove that 23yrs prior you'd have any idea that you would end up in a care home.

Worth repeating again.

Because the government know things like house moves don't always happen immediately, and people will be sitting with the proceeds of a house sale in their bank for a little while, you are covered for up to £1.4 million for sixth months!