Savings account after inheritance

[butterfliesandrainbows2022]

I'm fairly clueless when it comes to financial matters but I did read you can pay tax on interest made.
I was looking at doing the TSB Monthly saver which you put a Max of 3000 into, then 42/43k into their limited access 12 Month account.
I have zero income & dont claim any benefits when I googled I couldnt see if that meant i'd need to pay tax or not. And also if they were the best accounts for me to go to. I'm not planning on withdrawing any of the money for the whole term & will be putting enough for the Year into my usual essentials account

If you don’t have any other income at all you can earn £12,570 interest tax free as your personal allowance, plus another £1,000 savings allowance.

what is your plan for the money? If you don’t need some of it for many years it might be worth investing it

Put £20k into a cash ISA before the end of this financial year and then another £20k once the new one starts. You can get some decent rates and the interest is tax free.

Thank you that's the total of all the money I have(unless I get lucky enough to get a job) So thats why I was only looking at the 12 month accounts as i'll need the money after that.

I didnt realize they were tax free, The money hasnt hit my account yet but if it arrives before April 6th that would be perfect for the 40k. As I saw a 18 month fixed rate ISA.
My idea atm, is 20k in the ISA(40 if it arrives sooner) then the other 20k in a save well limited access for 12 months. Then 3000 in a Monthly saver for 12 Months. Then the amount left will be in my essentials account to live on for the Year

Look at Building Societies rather than a bank as you’d get a better rate.

You can do your ISA at instant access or for one year. Open a fixed rate this year and then a flexible ISA after the new tax year on 6th April. Ford money currently pays 4.35 % that is equivalent to 5.2 before tax. ISA makes much more sense. Put the rest in an instant access account also pay 4.35

You could also consider premium bonds for some as easy to access and returns can be decent but not obviously guaranteed and no tax to pay

If you have no other income then as pp has mentioned you can have over 12k in interest tax fee. Consequently don’t just look at isa rates, but the bests rates available. MSE is a good place to start researching rates
www.moneysavingexpert.com/savings/savings-accounts-best-interest/

OP states that she has zero income and therefore doesn’t pay tax. She therefore needs to look for the best rate for her money which may not be an ISA.

If you have zero income, you can earn £18,570 interest tax free every year.

The TSB monthly saver isn't really appropriate for what you want, since you can only pay in £250/month and you have a lump sum. Interest is calculated daily on the balance, so you don't get a whole year's interest on the full £3000. Essentially you'll get 12 months' interest on the 1st £250, 11 months' interest on the 2nd £250 etc.

You can find savings accounts with better interest rates than that limited access account.

Thank you everyone it helped me narrow down exactly what I need to research etc

OP dosent need to be concerned about interest being tax free. She says she has no income. She can earn £18570 in interest a year before paying any tax. Cash ISA is unlikely to be her best option. There are better rates.

No need to put it in an ISA if you are a non tax payer. There will be better rates elsewhere.

A regular saver is very appropriate for part of the money. OP could drip feed the monthly amount from another high interest account to maximise the interest on that portion of the money. She could even do that with several regular savers. Doing this would gain more interest than just leaving it sitting in one account. Especially as investing it probably isn't best for her right now as she may need it after 12 months.

Why is tax even a consideration? OP has no income and does not claim benefits. She can earn £18570 in interest before paying tax. Premium bonds will.mist likely erode the value of her cash over a 12 month period compared to just about any other product on the market.

Yes, OP could do that but it's probably an over-complicated solution for the question asked, and needs an instant access saver to keep the cash in the meantime so it's not just hanging around in her current account.

Yes, as I said in my post a high interest account. They are everywhere. A couple of days to set up a few accounts could see a much better return on her money than just sticking it in one account and leaving it there. OP obviously has limited funds so it would make more sense to make those funds work as hard as possible with no risk to the capital. Once the initial set up is done everything is automated and OP can just sit back and watch the interest add up for 12 months.

https://www.gov.uk/apply-tax-free-interest-on-savings

As pp have explained you have your personal allowance, starter rate for interest and tax free saving allowance. These add up to £18570. It's slightly complicated but explained in this link. The best place to look for the best interest rates is Moneyfacts website.

A mixture of instant access, limited access, notice accounts and/or fixed rate bonds may work depending on how much access to your cash you want and when. Some instant access accounts limit withdrawals so check carefully.