Where to put large lump sum for building works?

[UpUpAwayz]

We are just about to remortgage and when we do we will get a payout of approx. £70k which we took as additional borrowing to fund renovation works. The paperwork asked for my account details of where to deposit the funds and I had to list my current account because I don’t have any other account that could take that kind of cash - I have a regular saver which has a £250 a month limit, another with £150 a month limit and two cash ISAs. There will be about two months between the cash being deposited and building work started and then we are doing stage payments over 4 months and by the end it will all be spent. I don’t want it in my current account all this time because this obviously has a debit card attached and I worry about the card getting lost or stolen and then the cash being accessible. Where do folk put this kind of money?! Thanks

I’m no financial expert but personally I’d put it into premium bonds. Your money will be fully protected and there’s always the chance of a big win. My return on my premium bonds is currently beating my savings accounts. There’s a £50k limit per bondholder but you say we so I’m assuming there’s two of you. Your bonds will only be eligible for the draw after you’ve held them for one month. Withdrawals take three days.

Put 50k into premium bonds? It’s the top amount but can earn and easily accessible ? Rest into a saver possibly.

Has your bank got a savings account where it's easy access but you get a reasonable interest rate if you do up to three withdrawals a year, then interest rate goes down.

Premium Bonds or ISA (no need to declare the 'interest' for tax), or instant-access on a platform like flagstone (you may need to declare the interest for tax).

A 5% interest bank account like chase

You don’t say whether your ISAs are from this tax year, but assuming they are not and you still have your allowance I’d put £20K each in the best rate cash ISA you can find (easy access or one that permits a few withdrawals per year) to earn a guaranteed couple of hundred pounds while it’s in there.

The remaining £30k could go in Premium Bonds - you never know, you could win big!

I wouldn’t bother with premium bonds for that amount of time. You would have to wait at least a month for them to be entered in a draw. Then, although you could win big, the average return is actually not great.
Money Saving Expert, or other similar sites provide lists of savings accounts and their returns. As PP mentioned, a savings account that you can withdraw from four times without the interest rate dropping would be ideal.

The chase savings account already mentioned is ideal. It’s a good rate and there are no penalties for withdrawals. Don’t be put off by the need to open a current account as you don’t need to close your existing account if you don’t want to.

If you only need it for a few months just open an easy access savings account attached to your current account and put it in there. Not really worth maximising interest and I’d find it simpler just to have with the same bank (as long as your not over the £85k fscs amount in total).

I've just opened a Chase savings account (and current account as needed for the savings account) for the 5% introductory rate (although it is variable and drop to 4.75% is announced).

If you would pay tax on the interest and haven't fully funded your ISAs then that would be sensible, I think Trading 212 has a decent cash ISA rate, but check online info.

I wouldnt bother with Premium Bonds for the short period you are talking about (and I say that with full holdings), but they are safe if you fancy the punt.

I just remembered that I had an old Chase savings account so I went and looked and I’ve only got 2.75%! Is that because I’m an old customer?

In answer to a pp, I’ve not used much of my ISA allowance this year and not has DH as we moved house so maybe we’ll put 40k in there and then the remainder in an easy access saver, maybe the Chase one or I might see if I can get a higher rate but not sure if it’s worth it for a few months. I have a small amount of premium bond and IIRC it’s a right faff paying them in and out so I probably won’t bother with those as I’d need to do the first withdrawal after only a couple of months.

Yes.
"Chase UK is offering a 2.25% AER fixed bonus on their savings account for new customers, in addition to their standard variable rate. This boosted rate is available for the first 12 months for new customers who join from June 9, 2025, and is part of a limited-time offer."

Check https://www.moneysupermarket.com/savings/

I would do isa not premium bonds as people suggested my mum had maximum amount of them 20 odd years and nothing back. Isa will give you a little bit of interest

ISA instant access rates tend too be lower than non-ISAs, and if it's only for a few months you might not earn enough interest to pay tax anyway (depending on what rate of tax you pay).

See if you can get a savings account that pays interest monthly. I have one with Santander but that might be for existing current account holders. Think I saw one last year with one of the building societies, might have been Kent Reliance.

Money Saving Expert site has an up to date list of the best easy access savers. You start earning interest from day one and most pay it monthly. £70k is less than the £85k limit for FSA protection so your money will be safe.
There are plenty of accounts paying around 4% which is £460 interest in 2 months.
If you have other savings which will tip you over the £1000 interest allowance (or £500 if you are a higher rate tax payer) then you can always split with your husband as you both get the allowance.

You might be able to open a new Chase account with a better interest rate. I did this.

If you use a money market fund, such as CSH2, in an ISA or general investment account on a platform like HL then you’ll get interest daily, and at a slightly higher rate than with a regular savings account.

Quite right to be cautious about Premium Bonds and understand their pros and cons. However I would think it inconceivable for someone to have the maximum holding for twenty years with no prizes. Have I understood you correctly? When I have held the maximum amount, I have won a couple of prizes every single month. My overall rate of return was comparable to a mediocre savings account. I understand this is the expected norm.

Definitely worth doing premium bonds, tax free and if you're holding maximum value they get better returns.
For the rest a high rate limited access savings account.

Premium bonds aren't good for the very short term because you lose a disproportionate amount compared with interest due to not going into the draw for a month after buying them.

What do you think about my post directly above yours? The quotee may yet reply, but meanwhile have I misunderstood them? Maximum holding for twenty years with no prizes sounds impossible to me.

well known fact that only newer premium bonds win - if your are over 5 years cash them all in and buy new ones (or as in this case spend it on building)

When we did this last year we hadn't used any isa allowance so we both put £20k each into an ISA and the rest in an easy access savings account. We had tesco isa which is unlimited withdrawals so we didn't have to worry about only taking the money out in lumps. We just took it out as needed.