Where to stash cash?

[Gagagardener]

Asking for a friend who sold a house in summer 2021, and moved to rented in different part of country for a new job, expecting to use the £90k they made as deposit for their next house. Put money in current account to be able to move swiftly. House prices there are high, so it took a while to find something affordable. Vendor pulled out of sale this summer, just before arrival of new baby. Rented house is OK and rent is reasonable. But where should the money be? I think it's still in current account...

For simplicity, I would put it in a no-notice savings account. I have one with Marcus, for example.

If they know they won't want to touch it for a while, they could lock it away with a fixed term savings account (so you put the money away for a year or two years, you can't get it back in that time without a penalty but normally in return you get a higher interest rate). What I don't know at the moment is whether any banks are offering an interest rate that will still be competitive in a year's time. I have some business savings locked up until March and almost certainly would have been better keeping them in a more flexible savings account where the interest rate will change over time.

MoneySavingExpert is a good place to look to compare savings options. I don't think I would put it in a fixed term account although MSE has some reasonable options to consider. Also might be worth splitting the money as only 85K is protected in any one financial institution.

Thank you very much. I don't know about Marcus, though I've heard of it.

RCI bank are quite good easy access 2.45% or 95day notice 2.9%

I would split it across a couple of accounts because of the £85k thing. Ford Money is paying 2.47% instant access I think.

premium bonds might be a option for £50k of it (this is the max you can invest) but if she invests now she won’t be eligible for a prize until January’s draw.

2.5% easy access at Marcus. Could also dump 20k in their easy access ISA also at 2.5% and save some tax on the interest received. Both would be viewable/ manageable in a single app which is handy

Thanks for the suggestions. I'm going to put them all in an email and send. Then I think I'd better look at my own savings...

My HSBC online saver is currently at 3% for the first 10k. Check the accounts it’s going in as some don’t pay the advertised interest rates over a certain amount.

Depends on how long it will be before they use it. I would split among a few high interest accounts (like those suggested here).

Premium bonds could be an option. Though less so as interest rates rise. But a full holding could produce good results. Though a return isn’t guaranteed.

Sainsburys 2.75 up to 3 withdrawal a year

Look at HSBC online, 3%.