Short term savings?

Question

I have £200,000 from an insurance payout, which i intend to spend on a house. What is the best thing to do with it in the mean time? I can't do anything risky with it because the injury i received the money for, limits the type of job i can do and the ammount of hours i can work in a day, so this is my only chance of buying a house.

Answer 1

Talk to your bank - a bank is the safest place for it.  It depends on what time frame you are looking at.  Perhaps there is a money market account you can put it in for the same rate as a CD.  A money market account is totally liquid and generally has a tiered interest rate so that you may get the same rate (or better) as a CD.

Good luck!

Answer 2

You can get at least 8% interest on that amount, which would provide you with £16,000 in a year - over £300 per week.

Shop around at all the online banks, or at moneysupermarket.com

Answer 3

Put £3600-00 of it into a mini cash ISA. This is the maximum amount you can invest in an ISA in any financial year. This will give you a good rate of interest that you don't have to pay tax on.

What you do with the rest depends on how long you are going to invest it for.

If you want to wait a couple of years you will get a good return by buying investment bonds. You will not be able to get your money back before the bonds mature.

For almost instant access open a 30 day or 90 day deposit account with whichever of the big five high street banks is offering the best rate of interest. Stick to one of the big banks because, although they do not give the highest interest rates, at least your money is safe. Some of these accounts offer bonuses at the end of the year if you haven't made too many withdrawals.

For extra security, split your investment between two banks. These must be completely different banks not just differently named subsidiarys of the same parent corporation.

Do not invest in the stock market under any circumstances. You are not in a position to be able to recoup any short term losses that might accrue.

If you do want to gamble a bit, you could buy premium savings bonds. You wont get any interest but your capital is safe and you may have a big win. (I wouldn't recommend this but it is an option).

Additional information; A CD is a certificate of deposit. We would call it an investment bond. It gives a guaranteed rate of interest over a fixed term, this is usually a minimum of two years but typically five or ten years.

I see one contributor has suggested that you can get a minimum of 8% on your investment. Most banks are offering closer to 5% or 6% at the moment, which is far more realistic. Remember that return on your investment is directly proportional to risk. The higher the interest rate, the higher the risk. I'm afraid that no one gives you money for nothing.

Answer 4

You can placed it in time deposit which maybe less than a year or you can consult some online brokers and find out which stocks are okay to buy, low risk and are anticipated to increase in value soon.

Learn more about the different ways and types of investments here:  http://www.investmentpaysoff.com

Answer 5

No need for long answer:

INSTANT SAVER. (also called Saver or Esaver)

Your interest is paid monthly, and you can withdraw anytimes without any penalties.

The Post Office, Alliance & Leicester, Tesco...offer those products.

http://www.financecomparator.co.uk/savin...

All the best

Regards

J.

Answer 6

Any secure investment is going to pay apx 1% interest.  You will be glad when it is time to buy the house.  Any investment that pays more than 1%  has the risk of going down in value and you can't take that chance.  Put your money in the local bank.

Answer 7

CD = certificate of deposit.  It's a form of savings account at a local bank where you surrender access to your money for a set period of time in exchange for interest payments.  The longer the time period, the higher the rate.  If you need the funds before the time is up, there are significant penalties.  You'll need to investigate these before you agree to the CD.

In addition to the suggestions already offered, I would consider a money market mutual fund, if such things exist in the UK.  They typically pay a higher rate of interest than bank savings accounts, do not lose value, and are available upon demand.  The one thing you do not want to do is invest it in stocks, bonds, or any other risk investment.  These may pay more, but it doesn't sound like you can accept the risk of loss.  Any investment promising a higher rate of return will include more risk, despite what the sales person tells you.

Answer 8

you could put it into a short term CD for 6 months to 1 year.  Maybe put half into a CD and the rest into a regular savings account to quickly cover emergencies.  I would probably do something similar to this.