What should I do with the £180,000 from a house sale until I buy another?

Q I have been looking online for guidance on what to do with the money from the sale of my house, as I have yet to find another property to buy.

然而, I am now more confused now than when I started. After the sale of my house, which – touch wood – is going through at the moment, I will have about £180,000 in cash but what on earth do I do with it until I find another house to buy?
JD

一种 Stick the cash in a savings account paying the highest rate of interest. According to Moneyfacts’ Savings Selection for May 2021, that would be the SuperSaver Monthly Interest Account from ICICI Bank, which pays 0.5%. The only trouble is that you can only have that savings account if you already have a HomeVantage Current Account with ICICI Bank. Next best is the Annual Access 8 account from the Yorkshire building society, which pays 0.45%, but you can open one only by post or by going into a branch. If that doesn’t appeal, the best rate you’ll get is the 0.4% paid on the no-notice accounts from Marcus by Goldman Sachs, Saga, Tandem Bank, Nationwide, Charter Savings BankLeeds building society.

If you don’t think that you’ll need access to your cash for the next three months, the 90-Day Notice account from Moneycorp Bank offers 0.65% on your cash, provided you don’t withdraw any money within the 90-day term.

Whichever savings account you choose, if you still haven’t found somewhere to buy after six months of opening the account, you would be well advised to split your savings over several accounts.

That’s because the amount of money protected by the Financial Services Compensation Scheme – which pays out if a bank, building society or credit union goes belly up – goes down. Under the temporary high balances rules, the FSCS temporarily protects balances of up to £1m if the cash has come from certain life events such as the sale of a home or money from divorce proceedings – but only for six months. After that, the limit is £85,000 per person per account (£170,000 for a joint account). To put it another way, 如果, after six months, the financial institution you trusted with your £180,000 went bust, you would get back only £85,000 of your savings.

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