Monthly interest savings account for 530k

[bigtomski]

Hi all, looking for some advice please on the following.
We are selling our flat in London with a view to renting for maybe 6 to 12 months before then purchasing a house.
We have a buyer who wants to complete before Christmas, and once selling fees and the mortgage is paid off we will have approximately 530k.
Any ideas as to where to put the money so that it pays monthly interest?
Was thinking the monthly interest would be great as it would pay for the rent somewhere of about £1700 or so.
Something like Chip would seem to fit the bill as we would have immediate access to the money when we need it, but it's only protected up to 85k.
Thanks in advance!

[TownIdiot]

If it's a short term situation then the FSCS has a temporary high balance scheme that will cover it.

[worsy]

Don't forget you will owe tax on the interest at your marginal rate less allowance (1000 if basic rate).

[trevalvole]

TownIdiot said:

If it's a short term situation then the FSCS has a temporary high balance scheme that will cover it.

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

Otherwise there's the lower interest rates, but higher protection, of https://www.nsandi.com/products/income-bonds

May be a middle ground is something from a more established institution than Chip e.g. https://www.coventrybuildingsociety.co.uk/member/p...

[alscar]

Temporary “ high “ balances such as funds from a house sale are protected up to £1m for up to 6 months.
Maybe take a look at the Best Buy tables in MSE / This is money etc and pick the best one that offers monthly.

[deggles]

For that amount I'd probably consider NSandI. Fully treasury backed so no worries about FSCS 85k limit (there is temporary high balance protection but only for six months).

4% and monthly interest with their income bonds: https://www.nsandi.com/products/income-bonds

The other option might be short-term gilts which are more tax-efficient but a bit more hassle.

[bigtomski]

Thanks all. I had no idea about the temporary high balance protection.
Great to know, we could then just choose the best product from MSE.
Also the NSandI is a great link, could work well.

[ferret50]

Trading 212 currently pay 5.1% and add interest on a daily basis.

[C69]

OP, if you're going to be using the account to pay rent monthly, just be aware that Chip only allows three penalty-free withdrawals. From its web site: "If you exceed 3 withdrawals in a 12-month period, your overall interest rate will be reduced by a margin of 1.10% AER."

Also be aware that the Trading 212 rate quoted above is paid on 'uninvested cash' within an investment account. Part (or all) of your money will actually become invested in qualifying money market funds. QMMFs carry risk and are not protected by the FSCS.

[nyt]

Ulster bank offer 4,75% on your balance

https://www.ulsterbank.co.uk/savings.html?intcam=H...

[ShortShift811]

I'll be in a similar position shortly and plan to max premium bonds at £50K, then stick the balance in NS&I as mentioned above. Aiming for the least hassle and risk as opposed to maximising every percentage point, but appreciate everyone's appetite will differ.