What to do with some money?

[SauvignonBlanche]

I will receive a cheque for a sizeable amount in the next few days.
It will go straight into the joint current account but then what do I do with it?
I know the first thing will be to pay off any debts, obviously.

Any recommendations for a high interest account whilst we decide whether to pay off the mortgage or move house.

there is no such thing as a high-interest account at the moment, none keep pace with inflation. The base rate has been at 0.5% for years and the government's 'funding for lending' scheme means banks and building societies don't need to pay much interest.

if it is more than £85k per account holder, split it up between institutions - do some research as many different brands share banking licences.

fill up your cash ISAs - Halifax currently doing a 3 year trap/fix at 3%. pay off debts ASAP. Then make a quick decision.

Thank you specialsubject, I haven't a clue have I ?
DH mentioned the £80k thing but that won't be an issue.
We both have an ISA though haven't had any money to put in them.

I know I won't be able to decide quickly what to do but promise paying off loans and credit cards will be done immediately.

no-one is born knowing this stuff!

check your current ISAs - you can shift any money in them into the Halifax, and add this year's allowance. ISAs older than a year will be paying about 0.1%.

oops - reminder that the money in the Halifax will be stuck for 3 years, so that may not be right for you.

I'll look into that, thank you.

special may I ask, do you have to move the m oney around yearly for ISAs to get the best deal? For eg, I have one in halifax, and got something lousy like 50quid interest for the full year, whereas my Barclay one is about 30quid/mth, with similar amounts in them. I have no clue whether I can move the halifax one or how to do it, but i'm being taken for a ride on that one I feel.

banks rely on you not paying attention. Unless the rate on an account (ISA or otherwise) is fixed, you can be certain that it will have dropped, perhaps to 0.01 %! They do not have to advise you when a deal ends - although some do.

If that halifax account is more than a year old with no fix, shift the money.

everyone needs to keep a list of all their accounts and the interest rates they are paying. Martin Lewis says 'diarise to ditch and switch' - you make a note of the end dates of the deals and plan to shift the money. Loyalty is for suckers now.

even 2.5% is a lot more than 0.1%.

ps if money that you are shifting is in an ISA, make sure it is transferred, not withdrawn, or you will lose the ISA tax shelter.

head for moneysavingexpert.com!

Clear off any debts
Put the maximum amount in an ISA
Open a Santander 123 account (you need to pay in min £500 a month and set up 2 direct debits) but they will pay 3% up to £20k

Or look into a short term bond. I got 5% on a 6montb bond which isn't bad I think

Echoing the advice to pay off any debts first and use up your tax-free ISA allowance next. If you have anything left over that you don't need once you've done that you might want to look at some longer-term (10+ year) options. A personal pension, for example, or unit trusts.

jibberoo - where, where??? (although I fear it is probably no longer available..)

other deals at the moment: Nationwide FlexDirect, 5% on up to £2500 if you pay in £1000 a month (you can move money round from other banks). Lloyds Vantage 3% on between £3000 and £5000.

comes to about £100 a year from each account. :-(

If you pay into a pension then it would be tax free - if you have already paid income tax on it then you claim it back, if it is counted as income anyway.

This is significant if it is over 40k or so including your usual income and you will have paid 40% tax on some or all of it.

Thanks special, I will get onto it