What should I do with 50K?

[wheresthedummy]

H there,

I have 50K which is the proceeds of a house sale. I was intending to use it as a deposit on a new home, but we've since found out that we can't get a mortgage due to a default that my husband has. At the moment the money is sitting in my current account and I am inclined to leave it there or in another higher interest account until we are in a position to buy somewhere in a year or two. My husband on the other hand is keen to make the money work harder by investing it somewhere/how, but I am clueless myself (and not sure I should be taking financial advice from him - see default). Where is the best, risk-free place for this amount of money?

Taking any sort of investment risk isn't advised in the short term. Long term, equities etc usually come off best but if it's only for a year or two, I'd be keeping it in an account with some kind of interest.

...which means current accounts. Go open a Santander 123 each and put £20k in each one. Set them up with direct debits and to pay bills, and if you don't have enough salary going in, set up standing orders for the same money going round each month to meet the account conditions. Do this and you get 3% on the whole balance.

for the other 10k: a Club Lloyds account each, pays 4% on 5k. Again, you'll need direct debits and standing orders. Nationwide and TSB do 5% accounts but each only takes £2.5k or £2k respectively.

instant access savings accounts pay 1.4% max. So do the work above for extra money. There are no other options for higher interest, the above is all there is.

only savings are risk free. Investment by definition means risk.

Thanks special subject. That helped me too.

What specialsubject said. It's a faff and takes a bit of effort but you cannot do better than that at the moment unless you have a lot more money and the ability to risk it.

The only other option is a deposit based structured product. Your 'risk' is that if the index against which it is pegged doesn't reach a certain level you get no interest, if it does you get a higher rate than in a bank. You would normally have to commit for 6 years though. There isn't the same risk with deposit based products as they are covered by the financial services compensation scheme. Investec do a lot of them and you can use your ISA allowance. An IFA could help you but of course there is a charge.

Are you a standard rate taxpayer?