Short term money banking

[lewie]

Long story short - I will soon have circa £220k(ish) coming to me
My mortgage fixed rate expires in November- £(140k)
I plan to use the funds to finish my mortgage (again)- I believe £85k is the limit to protection in any one financial group
Any other safe avenues to store these funds to avoid splitting it up too much(3 financial bodies)
Thanks

[RustyBin5]

Husband and wife 85k each? Honestly though the chances of an unseen problem of the magnitude to sink a major financial institution happening this side of November are very slim indeed.

Also you should be able to pay off £14k of your mortgage without penalty now so that reduces the amount too. If you have savings of your own already use that to oat the 14k down.

Assuming the balance over the mortgage amount will be savings then an ISA for you and you wife if married would use another £40k.

So £220k less £14k to mortgage now leaves £206k. Less two isas leaves £166k which would mean only needing two institutions or 85k each for husband and wife in the same institution

[murkeywaters]

Pull the trigger on a Newman Daytona and wear it in good health - sorry that’s another forum!

I would be tempted to put some of that lump sum in a Vanguard investment, pick one (or several) that suits your required risk.

[lewie]

I’m single (that’s not an offer) 
I presume paying 10% now will not affect repaying in full in November

[Justin Case]

Are short term high balances not protected? May only be from house sale proceeds mind.

Can’t see you being unlucky enough to put it in a bank that fails between now and November - but you never know I guess!

[lewie]

It is from a house sale

[Justin Case]

It is from a house sale

Then you are covered to leave it in one account.

https://www.fscs.org.uk/how-we-work/...high-balances/

[Casper]

National Savings & Investments (NS&I) is state owned and guarantees 100% of savings with no limit

https://www.nsandi.com/

[lewie]

Many thanks all

[RustyBin5]

I’m single (that’s not an offer) 
I presume paying 10% now will not affect repaying in full in November

Correct

[Captain Morgan]

FSCS cannot confirm the eligibility of a particular temporary high balance unless/until a bank or building society actually fails. This is because we’d need to review all of the available evidence to check that there was a sufficient connection between the relevant life event and the sums in the depositor’s account.

Certain life events could have caused a temporary high balance in your bank account, including:

Real estate transactions (property purchase, sale proceeds, equity release - relating to your main residence only. This does not have to be a UK property but must relate to your main residence).

Unless you are comfortable with the ambiguity in the first paragraph and the funds relate to your main residence I’d be looking to split.

If it’s the aggravation of opening new accounts then perhaps look at some of the new players, monzo, starling etc you can confirm on the fscs site which ones are protected or not.

Edit: if it’s from a inheritance then it should be covered only the first paragraph to weigh up.

[unclealec]

I’m single

I have a wife you can borrow for purposes of funds storage.

[Christian]

As long as it is a well known bank, I'm not sure I would worry and go to the effort of shifting split amounts around banks. The risk of a catastrophic event to Barclays or HSBC with no prior warning has got to be negligable especially when when you add the temporary protection for high balances by FSCS.

If it is going to be a few months though, I would probably max out Premium Bonds with £50k of the money.

[mjc1216]

I have roughly 220k in HSBC after a house sale and knew it was covered.

Only when reading this thread did i realize it was only covered for 6 months.

It's been in longer than that but am i bothered...if HSBC goes bust there will be bigger things to worry about than money.

[demonloop]

Then you are covered to leave it in one account.

https://www.fscs.org.uk/how-we-work/...high-balances/

That’s a very helpful post: I was completely unaware of that.

[Geoff W]

Then you are covered to leave it in one account.

https://www.fscs.org.uk/how-we-work/...high-balances/

You are sort or covered - as the FCA points out - and only for a limited time from the date of deposit.

There are also some v strange triggers we've seen with clients where they try to move these monies around and the AML system kicks in, which then keeps things locked up for weeks sometimes months. And that's transferring between the same banking entity. For that reason alone I'd spread it not necessarily keeping to the £85k limit in a couple of places - yes there's a slim chance of a failure but 2 years ago would you think the we'd have spent the best part of a year indoors due to a pandemic?

[Passenger]

You are sort or covered - as the FCA points out - and only for a limited time from the date of deposit.

There are also some v strange triggers we've seen with clients where they try to move these monies around and the AML system kicks in, which then keeps things locked up for weeks sometimes months. And that's transferring between the same banking entity. For that reason alone I'd spread it not necessarily keeping to the £85k limit in a couple of places - yes there's a slim chance of a failure but 2 years ago would you think the we'd have spent the best part of a year indoors due to a pandemic?

Hear, hear...I'd spread it too err on the side of caution.

or just put the lot in bitcoins

[Passenger]

Dunno IF it's of any interest to the OP or anyone else, but there appears to be an Aviva 1 year fixed bond just launched offering 6 percent p.a., I'm doing some more research.

[Justin Case]

Dunno IF it's of any interest to the OP or anyone else, but there appears to be an Aviva 1 year fixed bond just launched offering 6 percent p.a., I'm doing some more research.

Link? Seems too good to be true.

[Passenger]

Link? Seems too good to be true.

That's why I'm digging, think it runs to 2036 but you've an annual option to review/ renew or close it...Missus is just on the phone with Hargreaves Lansdown now, think you can wrap it in an ISA...

This is the headline fashizzle Aviva emailed us...


1 Year Fixed Rate / Re-new Each Year Until Redemption.

Our new approach was put in place to give investors more financial freedom and to benefit from higher interest rates, without compromising on capital protection.
Below are the KEY Features to investment vehicle.

Key information:

* FSCS Protected up to £85.000 individual /£170.000 joint accounts.

* 1 year terms only. Option to renew each year until redemption 2036

* Our bonds are ISA compatible / ISA transfers are also available.

* All investment capital is returned end of term/s

* Exit the bond prior to redemption without incurring penalties.

* Fee - 0.25%. £25.00 per £10.000 invested. Capped at £125.00 . Fee each year you renew

* Monthly / Quarterly / Annual interest payments.

* Decide not to renew the bond at any stage we simply purchase the bond back from you for the same money and then re-distribute it to another investor. This process will be repeated until the redemption date.

[lewie]

Paid 10% off my mortgage yesterday (£15.5k) and they told me I could actually repay it in full from November this year without penalties

[Montello]

That's why I'm digging, think it runs to 2036 but you've an annual option to review/ renew or close it...Missus is just on the phone with Hargreaves Lansdown now, think you can wrap it in an ISA...

This is the headline fashizzle Aviva emailed us...


1 Year Fixed Rate / Re-new Each Year Until Redemption.

Our new approach was put in place to give investors more financial freedom and to benefit from higher interest rates, without compromising on capital protection.
Below are the KEY Features to investment vehicle.

Key information:

* FSCS Protected up to £85.000 individual /£170.000 joint accounts.

* 1 year terms only. Option to renew each year until redemption 2036

* Our bonds are ISA compatible / ISA transfers are also available.

* All investment capital is returned end of term/s

* Exit the bond prior to redemption without incurring penalties.

* Fee - 0.25%. £25.00 per £10.000 invested. Capped at £125.00 . Fee each year you renew

* Monthly / Quarterly / Annual interest payments.

* Decide not to renew the bond at any stage we simply purchase the bond back from you for the same money and then re-distribute it to another investor. This process will be repeated until the redemption date.

Let us know how that goes as that could be of interest to me as I am managing the proceeds of a house sale to cover care bills and so cant invest long term with that capital.

[Geoff W]

Paid 10% off my mortgage yesterday (£15.5k) and they told me I could actually repay it in full from November this year without penalties

Wow nice...wish Lloyds would let me do that without "on and there's a charge for this...oh and a payments charges, and..."

[Passenger]

Let us know how that goes as that could be of interest to me as I am managing the proceeds of a house sale to cover care bills and so cant invest long term with that capital.

Hmmm well after contacting H and L AND speaking to the man at Aviva, he seems to think it's a scam, at least insofar as the annual flexibility/ Easy access, so very sorry IF I've raised anyones expectations...jeez.
H and L does offer the Aviva 15 year Bond, same headline rate but it's a 15 year bond.

[wileeeeeey]

Nice you were able to pay 10% and clear the rest in November.

Without question I would max your ISA/s and split the rest into 2-3 accounts under FSCS limits.

Marcus and Virgin were two of the better ones for me which i was using up until last month.

[Justin Case]

With interest rates so crap what is point in using ISA allowance for short term cash?

[walkerwek1958]

In answer to the OP’s question, don’t forget about premium bonds! £50K can go in there and you’ve a (very slim) chance of winning a substantial amount. In reality you’ll get a couple of £25 prizes if your lucky, but the money is safe and can be accessed quickly. Mrs W and I have done this.....we await the big win!

Trying to get any worthwhile return on cash is futile at the moment, can’t see that changing for a while. It’s frustrating having the cash available to repay the mortgage and no risk- free way to make anything on it to set against the mortgage interest, but that’s how it is at the moment.

I’m in a similar position till August 2022, having borrowed to buy a property before selling my old one, using a mortgage as a bridging loan.

[wileeeeeey]

With interest rates so crap what is point in using ISA allowance for short term cash?

Depends if you're going to use your allowance for the year. If not, go for it even if it is just a few months.

For me my ISA rate was the same as my savings rate and and as the interest payments were above the tax free limit I wanted to limit the bill later on.

[ernestrome]

Premium bond win rates are a joke (1%). I would much rather stick my money in a 1% fixed rate ISA than hope for a decent win on my bonds.

[David_D]

Link? Seems too good to be true.

That’s an understatement! I’m piling in for 6% risk free!!!

[David_D]

Premium bond win rates are a joke (1%). I would much rather stick my money in a 1% fixed rate ISA than hope for a decent win on my bonds.

You’d rather 1% with no chance of a big win over 1% (almost guaranteed) plus the chance of a big win? Why?

[Anygreg]

You’d rather 1% with no chance of a big win over 1% (almost guaranteed) plus the chance of a big win? Why?

My thoughts as well. Each to his own I guess

[ernestrome]

Sorry I was not clear. I am not making anywhere near 1% on my and my children's premium bonds. Maybe if you hold 50k you actually get near 1%. So I'd rather have 1% guaranteed than the 0.25% or less I am getting even if there is a chance of more. Curious to know if anyone else is actually making 1% or more on their PB holding?

https://www.which.co.uk/money/savings-and-isas/savings-accounts/national-savings-investments/premium-bonds-a05pg3u3yq0c[/url] - Which?

It seems like the vast majority of people will not be making 1% on their PBs. All in all I'd rather have the 1% if I were saving for the short term but in general I'm saving for the longer term and so choose other investments than PB or fixed rate.

[David_D]

Sorry I was not clear. I am not making anywhere near 1% on my and my children's premium bonds. Maybe if you hold 50k you actually get near 1%. So I'd rather have 1% guaranteed than the 0.5% or less I am getting even if there is a chance of more. Curious to know if anyone else is actually making 1% on their PB holding?

Ah, OK.

There’s a calculator on the Martin Lewis site that tells you the % chance of winning whatever for various levels of holdings.

£50k and you’re likely to get the prize fund rate over the year.

I had £6 or £7 worth given as gifts when I was a kid and had precisely nothing on them over decades!!

[demonloop]

I won £525 last month on PB, I’ve had several £25/50 wins. Only invested 8/9 months ago

[Justin Case]

I won £525 last month on PB, I’ve had several £25/50 wins. Only invested 8/9 months ago

I won £500 back in April 2018 but every win since has been £25 or 2 x £25. Pretty consistent every month though.

[ernestrome]

Need to either know how much you have invested to give context or just the percentage return you are achieving if you'd prefer not to say.

[valleywatch]

Where do you get 1 % interest on a "short term" I.S.A. from please?

Best I can see is maybe 1% for 3 or more years? Not my idea of "short term", which is what the O.P. is asking for.?

[walkerwek1958]

To clarify, I suggested premium bonds as a short- term home for cash. OP wants to pay his mortgage in November so he can’t commit to a fixed rare bond/ISA, consequently he’ll bugger all (<0.5%) interest on an instant access savings account so the premium bonds is as good a home as any for £50k.

I’ve looked around for a decent fixed rate bond on a 1 or 2 year timeframe and come up with nothing tempting, we’ve opted for premium bonds combined with paying 10% of the mortgage balance in Jan 2021 and 2022. Realistically I don’t expect to win a significant amount but I’d hope to get a return between 0.5% and 1% in prizes. Mortgage rate is 1.6% so I’ll probably end up paying 1% net or a tad less. That’s a relatively small addition to the overall house move /renovation/ extension cost, taking out a mortgage aged 62 didn’t exactly appeal to me but it was the right decision, it'll get paid off in 2022 at the earliest penalty- free opportunity.

I checked on the returns I’ve had since 2016 from premium bonds, with £30K invested I managed a 1.4% return per annum which was fairly consistent year to year. However, the prize payments have gone down and I think the average is supposedly around 1% so I don’t expect my luck to continue.

[Taxboy]

That's why I'm digging, think it runs to 2036 but you've an annual option to review/ renew or close it...Missus is just on the phone with Hargreaves Lansdown now, think you can wrap it in an ISA...

This is the headline fashizzle Aviva emailed us...


1 Year Fixed Rate / Re-new Each Year Until Redemption.

Our new approach was put in place to give investors more financial freedom and to benefit from higher interest rates, without compromising on capital protection.
Below are the KEY Features to investment vehicle.

Key information:

* FSCS Protected up to £85.000 individual /£170.000 joint accounts.

* 1 year terms only. Option to renew each year until redemption 2036

* Our bonds are ISA compatible / ISA transfers are also available.

* All investment capital is returned end of term/s

* Exit the bond prior to redemption without incurring penalties.

* Fee - 0.25%. £25.00 per £10.000 invested. Capped at £125.00 . Fee each year you renew

* Monthly / Quarterly / Annual interest payments.

* Decide not to renew the bond at any stage we simply purchase the bond back from you for the same money and then re-distribute it to another investor. This process will be repeated until the redemption date.

Looks too good at the moment. Do you think it might be a scam email https://www.aviva.co.uk/help-and-sup...ding-to-be-us/

I can't seem to find any reference online but that may be my rubbish search skills though

Sent from my moto g(7) plus using Tapatalk

[ernestrome]

Is it Aviva ae57 6.125% 2036 bond?

https://www.lse.co.uk/SharePrice.asp...e=Aviva-612536

[valleywatch]

Never mind the 6% Aviva bond!

Where can I get 1% on a non fixed year or whatever I.S.A.?

Im getting just 0.55 with the Coventry, thats the best I can find? (not an I.S. as I cant find an I.S.A. at 1% with easy withdrawals etc.).

[Taxboy]

Is it Aviva ae57 6.125% 2036 bond?

https://www.lse.co.uk/SharePrice.asp...e=Aviva-612536

If so am I correct in thinking that at current price of 124.7 you would get a 4.8% return being 6/124.7*100?

Having said that if the price dropped back to 100 you would still get 6p per share as interest each year but would have lost 24.7p per share in its actual price

Hope I've understood this correctly but please feel free to correct any misunderstanding on my part

Sent from my moto g(7) plus using Tapatalk

[Passenger]

Looks too good at the moment. Do you think it might be a scam email https://www.aviva.co.uk/help-and-sup...ding-to-be-us/

I can't seem to find any reference online but that may be my rubbish search skills though

Sent from my moto g(7) plus using Tapatalk

Yup see Post 24, gave information onto the Aviva fraud people.

Scam was clever in that yes Aviva does have a 6.125 per cent bond 2036 product.

[Taxboy]

Yup see Post 24, gave information onto the Aviva fraud people.

Scam was clever in that yes Aviva does have a 6.125 per cent bond 2036 product.

Thanks for that for some reason I overlooked post 24 .. oops

Sent from my moto g(7) plus using Tapatalk

[Taxboy]

Never mind the 6% Aviva bond!

Where can I get 1% on a non fixed year or whatever I.S.A.?

Im getting just 0.55 with the Coventry, thats the best I can find? (not an I.S. as I cant find an I.S.A. at 1% with easy withdrawals etc.).

I think you'll struggle as cash ISAs are in less demand with the introduction of the interest allowance amounts. If you are desperate to max your savings Coventry BS offers 1.05% on regular savings but capped at £500 per month
If you already have a Yorkshire BS account then they are offering 3.05 % on regular savings max £500 per month

Sent from my moto g(7) plus using Tapatalk

[Chris_in_the_UK]

Yup see Post 24, gave information onto the Aviva fraud people.

Scam was clever in that yes Aviva does have a 6.125 per cent bond 2036 product.

It is an established scam - why did you think it was anything other?

[valleywatch]

I think you'll struggle as cash ISAs are in less demand with the introduction of the interest allowance amounts. If you are desperate to max your savings Coventry BS offers 1.05% on regular savings but capped at £500 per month
If you already have a Yorkshire BS account then they are offering 3.05 % on regular savings max £500 per month

Sent from my moto g(7) plus using Tapatalk

Thanks for that.

I saw a post , in the thread, where somebody said you could get 1% on an I.S.A.!

Ive got £10,000 in premium bonds, had back about 1% over the last year...Have some money with Coventry, which pays out 0.55

If I could get 1% easy access, Id be quite happy!

[Passenger]

It is an established scam - why did you think it was anything other?

The look and apparent verisimilitude/ quality of the promotional email, we do have some other Aviva products , the headline rate of 6.125 does match a real product...I'm not too up on established scams Chris tbh, though happily know enough to apply caveat emptor principles.
Also we've been saving long enough to have had for example 5 year fixed rate products as well as other corporate bonds paying as much and more So the possibility that there just might be such a product was plausible ie a 15 year fixed rate albeit with the potential option to access funds on each anniversary, seemed enough to be worth digging into...hope that clarifies it for you amigo.

[BRGS]

I’m in agreement with a lot of what has been said

Worth having a look to see if you have any old accounts at building societies etc that you haven’t used for ages then it’s easier to pay into them and split the money up that way. It’s not difficult to open up spare accounts on the internet. Transfer £5 to see if fit works then usually you can move £10k or £25k per day. virgin money and Nationwide were both fairly easy to do.


NS&I is a good idea as the whole lot is protected and although the interest is low so it is everywhere and in 6 months I guess you’ll be redoing the exercise after you’ve cleared the mortgage.

I think if you have loads of cash then PBs is a good place for some of it but if not then it seems a bit of a tie.

Looks like you’ll have £80k left over so you might as well get that invested now for whatever you want to do with it.