Where to put cash when breaking chain?

[little0miss0mac]

Hi all
Having been through months of agonising waiting and now horrible complexity with mortgage offer expiries and moving dates, we're contemplating doing what we really didn't want to do: moving into rented to break the chain so everyone in our short chain can get what they need.

What happens to the pile of sale cash in situations like this? If we're in rented for a couple of months, it seems like the interest on the cash could go towards rental costs. If you've been in this situation, what did you do - just find the best interest on an instant access account that allows that amount of cash?

I put the maximum in premium bonds and the rest in instant access interest accounts.

Thanks. How long was that for, and did you make any money on the premium bonds?

I split it between savings accounts. It was a monumental headache.

Shoved it in savings accounts. Make sure you don’t go over the £85k limit that’s insured.

Look at NS&I savings accounts. The interest rate is low, but up to £2m is protected. Much simpler than multiple accounts.

@LittleBearPad

Shoved it in savings accounts. Make sure you don’t go over the £85k limit that’s insured.

Ugh, I'd forgotten about that bit. I can't believe how much ballache I'm prepared to tolerate for the sake of this. DH has sworn never to move again and frankly I feel the same.

I believe the 85k limit doesn't apply when it's related to the sale of a primary residence, as we had this 3 years ago.

I did what the PP above suggested and stuck it all in an NS&I account. Very easy to move in and out, though several years on I am still trying to persuade HMRC that I’m not earning several grand in untaxed interest each year.. So bear that in mind and (depending on how much and how long) be prepared for a tax bill.

A quick look on the money saving expert website

The bank guarantee for house sale proceeds is £1m for up to a year (I think, it's certainly not the £85k)

We split ours between 2 lots of max premium bonds and an instant access account with Marcus. We did have some wins on the PB but the overall interest rate we got was better on the Marcus account for the 8 months we were in rented. I get 0.7% on it which is pretty good for an instant access savings account at the moment I think.

We did have a bit of a mad dash around banks when transferring it back to the solicitors for our eventual purchase though as we had to arrange multiple CHAPS transfers (each with a £20 ish charge) as we didn't think ahead about moving money to a single account within the daily online transfer limit ahead of exchange. Easily sorted by planning ahead but something that can catch you out.

@Savvysix1984

A quick look on the money saving expert website

This is great, thank you, and now I feel bad for being so lazy I didn't check there first 😬. Most unlike me. I blame the English property system for a brain too full to use Google effectively any more 😆

Yes I’ve had winnings every month and my dad (who tracks my prizes on his app) says I’ve won more than I would have got in interest

@tothemoonandbackbuses

Yes I’ve had winnings every month and my dad (who tracks my prizes on his app) says I’ve won more than I would have got in interest

V interesting, thanks

@LittleBearPad

Shoved it in savings accounts. Make sure you don’t go over the £85k limit that’s insured.

As PPs have said, FSCS protection is available for up to £1 million for a period of 6 months for just this sort of eventuality.

www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/

I would say premium bonds. I win about 10 months out of 12 on 28k holding. The wins are usually £25, but the odd one is a hundred. I usually make about £250-£300 per year.

You do have to remember that when you invest those premium bonds are not in the next draw, it's the one after.

So I bought ds, £100 last week. They will be in the draw at the end of april/being of May (not sure exactly which day the draw it).

So I suppose it depends on how long you are going to do this and how long you think the money can sit there.

Slightly different situation as we were overseas when our chain broke, but our solicitor held ours for us. We only had a lag of a couple of months though as our onward purchase was progressing, just slowly, and we were happy for them to be custodians whilst everything was being sorted out rather than shunting it back and forth…

@Twasacceptableinthe80s

Slightly different situation as we were overseas when our chain broke, but our solicitor held ours for us. We only had a lag of a couple of months though as our onward purchase was progressing, just slowly, and we were happy for them to be custodians whilst everything was being sorted out rather than shunting it back and forth…

Did they pay you interest on it?

@Userqrgtyd

Look at NS&I savings accounts. The interest rate is low, but up to £2m is protected. Much simpler than multiple accounts.

This is what I did.

No, but then we didn’t ask. Not really v financially savvy, but we were trying to move our whole lives back across the continent so weren’t on the ball! As I say it was more for a matter of weeks than years so was one less thing for us to worry about and ultimately a relatively small price to pay to prevent the chain collapsing and us being homeless when we flew back…

@LittleBearPad

Shoved it in savings accounts. Make sure you don’t go over the £85k limit that’s insured.

There is a MUCH higher limit for the proceeds of a house sale - for up to a year IIRC. will see if I can find it.

We opened a Direct Saver account with NS&I. Fairly quick and easy to do transfers to your bank account when you need to meet costs and deposit. Premium bonds also instant access with regular wins but we already maxed out on these and didn't need them for purchase.
I should say that the previous time we were in between houses was the credit crunch and so we were juggling multiple accounts which was a nightmare. NS&I feels safer.

Why is NS&I an exception to the usual rule? I don’t understand.

Savings and current accounts bearing in mind the limits I was able to transfer daily. Limited by £20k a day on my savings and £100k on my current account but had to make 4 payments of £25k. Absolute ballache, I hated having hundreds of thousands pounds sloshing around many accounts.

@DesertStorms

Why is NS&I an exception to the usual rule? I don’t understand.

It’s state owned and backed by the Treasury.

We used the same solicitor for selling and then buying a few months later. We left half a million with them for 3 months without giving it a second thought.

That was probably a silly idea thinking about it but our family have used the same solicitor for 30 years and she is completely trustworthy.