Where to put the money right now??

[haimishsha]

NS&I just slashed the rates from 1.16% to 0.1% on a flex saving. wtf?

I need a flexi saving account so I can tap in as I require with ideally 1+% return for around 90K investment. I am able to top up regularly (so like a regular saver account) say up to £300 monthly.

A quick search online delivered bad news.. nothing worth the trouble of transferring, so I am looking for a creative solution here to get the money working. Any thoughts?

You need to dip in and out, but how much of that £90k do you actually need easy access to, and how much could be tied up for a bit longer? What is the money ultimately for? How old are you?

My heart's bleeding op - pay for the services of an IFA who, like the pp said, will ask you how much of that £90k you do need instant access to. Longer term investments do yield higher returns, even in low-risk accounts. Pay for advice.

Coventry building society Double Dip. However it is variable rate so who knows when the rate will drop and it is two access per year before you have a penalty.

Does all £90k really need to be in cash? That's a lot of cash which is constantly going down in value due to inflation. Would it not be better to invest some of it... though that comes with risk.

You can only get market beating returns if you are prepared to take risk to your capital, or tie up your money for a long time. What level of risk can you tolerate?

You should plan for scenarios with negative interest ie you pay a fee to hold an account, due to difficult economic conditions.

Start keeping up with financial news as your "wtf?" reaction to low interest rates is fairly ignorant in the current climate, a few minutes reading online each week would help you understand the problem in the National and global economy and what the predictions are for short and longer term recovery.

How would Premium Bonds do ?
Instant access but no guarantee of a win, although at your deposit people report fairly regular wins.

@Sunseed thanks. about 60% will be needed over the next 6-10 months for building works. We are commissioning works in packages so need the money to be completely flexible to pay the different trades and buy materials etc.
The rest 40% approximately is for school fees which will be fully drained by summer 2022.
From what I understand fixed long-term savings will give a decent return from 3yr fix but we will tap into all this money in about 2.
We are over 40 by the way..

@Ffsffsffsffsffs thanks for replying. Yes I know. See my note above.

@nannynick and @FippertyGibbett
Thanks guys. As I said above.. we need to be able to tap into this money fairly regularly, that's my problem...

@nannynick

Coventry building society Double Dip. However it is variable rate so who knows when the rate will drop and it is two access per year before you have a penalty.

Does all £90k really need to be in cash? That's a lot of cash which is constantly going down in value due to inflation. Would it not be better to invest some of it... though that comes with risk.

There is a bank account called double dip! 🤭

@HathorX Hmm.... yeh thanks, I didn't really notice the pandemic until I followed your advice and read the news this morning. Cheers for the heads up!
... in other words, don't be so arrogant and condescending pls and assume 'wtf' means ignorance! You are reading too much into it.

With the money effectively committed it sounds like you can't afford to lose any. "Creative" generally means risk... which is unlikely to suit you here. So really you are stuck with just going with the best rate available, pitiful as they are.

Premium bonds may be your friend here if you want to gamble on zero returns... you never know your luck!

@Sunseed thanks. I think you may be right and that PB may be our only option at the end. The rates at the moment are very close to 0 anyway. The ones around 1%, the higher I found for a flexi saving, are usually with limited withdrawals..
fingers crossed for PB!

Is there someone else's allowance you can use to put the rest of the money in PBs? Trusted adult? A child (if you go this route, check that you can still get the money back as you need it).

The closer you are to the £50k, the more likely you are to get close to the 1% payout rate, which is likely to be as good as you can get at the moment.

Don't forget that the NS&I changes don't come into force for another 2 months, so you might as well leave the money where it is for the few few weeks. Also see what changes other banks etc make in this time.

@BarbaraofSeville that's a good point! Thanks for pointing out that changes are not immediate and indeed banks may change their plans.

One down side of premium bonds is that they are reducing the number of prizes (in effect, the same as reducing interest rates) when the saving rate reduction is planned. I had a Coventry flexible account which was paying 1% until quite recently but it's now been slashed. Coventry are quite good for fixed rates accounts.

A bit of a thread hijack here, but I find the headline inflation rate is much less than my 'real life inflation rate'. Officially, it's 1% but my food bills have gone up so much that my savings rates don't keep track with inflation at all.

Op, ignore the nasty comments - I was also a bit WTF when we got the NS&I email. I expected a drop, but not that big!

There was a lot of publicity regarding the decent rate early in summer, smacks to me of them getting people to open accounts then hoping they don’t bother to move the money when rates drop.

My young adult DC have some inheritance spread across 1/2 yr bonds, plus keep up to 20k/yr in an instant access account to drip feed monthly into their ISAs, so both of them and DH & I opened NS&I accounts in early summer, looks like we will be looking elsewhere in November.

Can’t imagine there being any decent rates, but we will see. We don’t want to put into PB as most will go into ISAs over next 2 yrs.

This one pays 1% (incl 0.4% bonus for first year) with unlimited withdrawals:

www.westbrom.co.uk/savings/online/websave-bonus-saver-issue-3

But only first £85,000 is protected so best to put £5k in another account. Yorkshire I think has account paying 0.95% unlimited withdrawals or Coventry / Principality offer slightly higher rates with limited withdrawals (2/3 per year)

Masthaven give fairly good rates and you can pick your term eg 17 months if you know a month when you'll need access for the two different waves.

How creative a solution are you looking for and what level of risk are you willing to take.

You could convert it to TrueGBP (a synthetic crypto derivative of Sterling) and put it into a Celsius network savings account. They are currently offering an 11.5% rate.

No minimum deposit and instant access.

This is not for the fainthearted however. There is a hefty learning curve to using crypto and it is still an emerging technology. Its also very scary being your own bank.

@Sophiesdog2020

Op, ignore the nasty comments - I was also a bit WTF when we got the NS&I email. I expected a drop, but not that big!

There was a lot of publicity regarding the decent rate early in summer, smacks to me of them getting people to open accounts then hoping they don’t bother to move the money when rates drop.

My young adult DC have some inheritance spread across 1/2 yr bonds, plus keep up to 20k/yr in an instant access account to drip feed monthly into their ISAs, so both of them and DH & I opened NS&I accounts in early summer, looks like we will be looking elsewhere in November.

Can’t imagine there being any decent rates, but we will see. We don’t want to put into PB as most will go into ISAs over next 2 yrs.

Exactly! I just moved the money to NS&I from another account 3 days before the email arrived! I think in the next couple years we will be bouncing the money from one account to another in a chase after the 'perfect rate' as they will all go up and down like a yo-yo...

If some of the money is earmarked for school fees, your best return may be to look into paying fees in advance - the contracts I've seen allow part payment in a fairly flexible way.