Where to put £200k

[Ed.M]

I am about to complete on my house sale and will have approx £200k equity. Which ideally I would put straight into another property, but circumstances mean I'll be in short term rented till I can get someone to accept my offer! (Two rejected with well over asking offers)

So where to invest in in complete safety with nearly instant access. Most bank accounts seem to offer woeful interest rates. Do any banks have anything remotely decent?

I'm thinking of maxing the wifes and my premiums can't be a bad idea. We "might" get lucky.

Thoughts,ideas,comments.

Oh and I'm not going to blow it on fast cars, hookers and class A's

Edited by Ed.M on Wednesday 16th June 20:21

Edited by Ed.M on Wednesday 16th June 20:22

[Joecooool]

Buy some BP shares.

[condor]

It's short term, just spread it around to keep it under the £50K compensation limit...and just accept you're not going to get much interest wise...but keep it safe.

[Ed.M]

Thanks

Is spreading it around still a necessity? I thought (naively perhaps) that if the bank were going to fold they would have done so by now.

[condor]

It's the safest option, and when there's little interest to be had anywhere - why not keep your money safe?
You could always gamble your money in shares of course

[Welshbeef]

There are tens if thousands or hundreds of thousands of people in the uk who have far more than £50k in every seperate bank institution don't worry if things get that bad you'll own your own house outright so no debt and everyone else will be shafted so you'd only need a shelf stacking job. To pay the bills

[Phooey]

condor said:

It's short term, just spread it around to keep it under the £50K compensation limit...and just accept you're not going to get much interest wise...but keep it safe.

Is the safety net £100k for joint couples?

[BBYeah]

Up to 2 million, 100% safe, 2% interest, no penalties on withdrawal and no notice:

http://www.nsandi.com/products/ds

Personally I can't be bothered with spreading between banks for piss all interest so am just using the above. I'm also not putting any more money into Natwest or Barclays on principal after very poor customer service , not that this is very relevant.

Edit: And good luck with the house hunting!

Edited by BBYeah on Wednesday 16th June 23:01

[Ed.M]

The idea of dealing with more banks than need be doesn't appeal really.

The NS&I looks nice and easy. If a little boring;)

It's amazing how low the interest rates on saving are, considering the high cost of borrowing for loans, credit cards and overdrafts. They really are trying to recoup some losses.

[walm]

Ed.M said:

The idea of dealing with more banks than need be doesn't appeal really.

The NS&I looks nice and easy. If a little boring;)

It's amazing how low the interest rates on saving are, considering the high cost of borrowing for loans, credit cards and overdrafts. They really are trying to recoup some losses.

I think 2 year fixes just hit an all time low.
BOEBR is at an all time low.
That is why savings interest rates are low.


Credit card and overdrafts just take advantage of people who aren't great at managing money (not preaching, I am one of these people) so always had crippling rates.

[blindswelledrat]

Ed.M said:

Thanks

Is spreading it around still a necessity? I thought (naively perhaps) that if the bank were going to fold they would have done so by now.

THere are still large fluctuations though.
A month ago the best advice would have been to fk it all into BP shares.
You would now have little more than half of it left!!!!

[Tiggsy]

What uk high street bank has ever gone down with public savings?

[Beardy10]

Tiggsy said:

What uk high street bank has ever gone down with public savings?

BCCI

For those not old enough to remember http://en.wikipedia.org/wiki/Bank_of_Credit_and_Co...

[Beardy10]

The depositors protection scheme should have a haircut of 10% on it...so you get 90% of your money back or something. Frankly people that were daft enough to give there money to the Icelandic Banks or to Northern Rock and not wonder why they were paying such good rates of interest need a little help understanding for the next time. For months before the Icelandic banks went bust you could effectively put money on deposit with them at 15% or more through the capital markets...they were paying Joe Public 7 or 8% which seemed great to the depositor but to the banks it was actually bloody cheap. Of course the regulators did nothing about it.....they just let the public and indeed most County Councils carry on until the music stopped.

General rule of thumb....never put your money on deposit with the bank that gives an outstanding rate of interest . Give your money to number three or four in the best buy guides.

[nomisesor]

Difficult - very poor interest rates everywhere & two adverse influences - tax & inflation. If you're a 40% taxpayer and you get 2% with NS&I you'll get £2400 p.a. net.

If RPI continues to run at 5.1% your £202400 will be worth about £192000.

If there are secure 3.5% accounts then £200k subject to the same effects would be worth just under £194000......

Of course if house prices show negative inflation / drop you won't be worried - but if they continue at 10% then in house price terms your £200k on deposit at 2% (taxable) would be (using CPI at 3.4% rather than RPI) worth £175278 in a year.

Why the papers rejoice at house price inflation is a mystery to me - people become slaves to huge mortgages, property goes out of many people's reach, inflated asset values stimulate massive borrowing and ultimately CDS defaults.

I'm sure someone will challenge these happy figures and suggest gold bullion!

[ringram]

"Irrational exuberence", springs to mind in regards to house prices.
Personally I would diversify the investment to lower risk. Unless you just use NSANDI etc.

[Tiggsy]

Beardy10 said:

Tiggsy said:

What uk high street bank has ever gone down with public savings?

BCCI

For those not old enough to remember http://en.wikipedia.org/wiki/Bank_of_Credit_and_Co...

Many high street locations in the UK?

[Welshbeef]

Mortgage Free is most peoples dream i.e. total security no rent to worry about just the odd council tax utilities (which if you were in real serious financial trouble you could just turn everything off not have the heating on etc until you have a job).
Food well youd buy value type food or try to be self sufficient as much as possible.

Car is something which could be sold if things were very tough (buy another when you have the cash).

Come on debt free here we go.

[Beardy10]

Tiggsy said:

Beardy10 said:

Tiggsy said:

What uk high street bank has ever gone down with public savings?

BCCI

For those not old enough to remember http://en.wikipedia.org/wiki/Bank_of_Credit_and_Co...

Many high street locations in the UK?

It had a few, no idea exactly how many. You certainly saw them in London.

[ringram]

Welshbeef said:

Mortgage Free is most peoples dream i.e. total security no rent to worry about just the odd council tax utilities (which if you were in real serious financial trouble you could just turn everything off not have the heating on etc until you have a job).
Food well youd buy value type food or try to be self sufficient as much as possible.

Car is something which could be sold if things were very tough (buy another when you have the cash).

Come on debt free here we go.

Why? If it costs you £1,000,000 over 30 years to buy a house nominally worth say £300k what is the point?
Security is relative. If you instead save £1,000,000 over 30 years, you can have £30k+ PA income which you can use to pay for rent or whatever food you fancy.

Sitting in a "secure" house with zero income to pay for rates, power, gas, phone or food doesnt sound worry free to me.

Of course the key is to have both...