Best Temporary Investment for Three Months for Excess Cash?

[Investor]

I am selling a portfolio of properties and the fairly large sum of money will sit in my bank account for about three months until I am able to invest the funds again.

I was wondering if anybody knew the best place to invest these funds for a temporary period so that I can at least match if not beat inflation? Obviously savings accounts don't do that. I've looked into P2P investing, but haven't come across ones that I can easily invest for a few weeks for?

Are there any decent yielding investments I can make for just a few months (that are ideally not too time-consuming to set-up) please?

Thank you in advance for the advice.

[Alaric]

Are there any decent yielding investments I can make for just a few months (that are ideally not too time-consuming to set-up) please?

Basically no, without risk to your capital. You may need multiple bank accounts anyway because of compensation limits if the Bank goes under.

If you have a share dealing account, there would be numerous potential near cash investments, not least Government Bonds. Don't expect to beat inflation though.

[swill453]

Basically no, without risk to your capital. You may need multiple bank accounts anyway because of compensation limits if the Bank goes under.

Although the FSCS limit for compensation is £1 million for 6 months for "temporary high balances" https://www.fscs.org.uk/your-claim/ques ... -balances/

Scott.

[Investor]

Thank you for both of the above - useful advice.

I never knew about the £1m limit for temporary FSCS limit, so handy to know.

I can set-up a sharedealing account, not a problem. Which bonds etc. would you suggest that are suitable for only three months? Would the return beat a savings account, as my alternative option is to invest the money with the best buy table's highest interest savings account?

[WorldCupWilly]

NS&I Direct Saver account - up to £2m guaranteed by HM Treasury pays 1%

[Lootman]

Which bonds etc. would you suggest that are suitable for only three months? Would the return beat a savings account, as my alternative option is to invest the money with the best buy table's highest interest savings account?

You could use this site to find a suitable gilt that matures in 2019:

https://dmo.gov.uk/data/pdfdatareport?reportCode=D9D

Or you could throw the lot into a very short-dated money market ETF, like ERNS:

https://www.ishares.com/uk/individual/e ... rough=true

[PinkDalek]

NS&I Direct Saver account - up to £2m guaranteed by HM Treasury pays 1%

NS&I Income Bonds at 1.16% AER (which is slightly more), variable, Maximum per person £1 million, No notice, no penalty but neither of those products meets the OP's aim that I can at least match if not beat inflation.

https://www.nsandi.com/our-products

[Pendrainllwyn]

I suspect anyone looking for a risk free, short-term access, inflation beating yield investment will need to compromise on one of the three. If not someone will be very popular for bringing that opportunity to our attention.

I doubt this is appropriate given your circumstances (particularly with Brexit around the corner) but since you mentioned P2P, Assetz Capital, one of the larger P2P platforms have a quick (instant) access account that pays 4.1% and a 30 day access account that pays 5.1%. These accounts invest in a portfolio of loans secured predominantly on UK property and Assetz Capital will only allow withdrawals under "normal market conditions" so access cannot be guaranteed and it's only a question of time before abnormal market conditions prevail. The account is not covered by the Financial Services Compensation Scheme. I have used their quick access account for relatively small sums and have successfully withdrawn immediately multiple times. However I understand that I am taking the risk that liquidity for their loans dries up or that losses on the underlying loans exceed the provision fund (*) and I cannot withdraw. In such case I could be left holding all or a part of my investment for a substantial period (years) and may not get back all the money invested. I have found their accounts very easy to use.

(*) My quick access account (I am not sure if every investor gets the same underlying loans) currently has 421 holdings and the largest position is 4.62% of the portfolio. The provision fund currently equates to a rather negligible 0.68%.

Pendrainllwyn

[absolutezero]

You could do worse than shove (some of all?) of it in the Premium Bonds.
Got to hold them for a full calendar month (so the whole of November) to be eligible for December's draw.
But who knows, your 3 months could turn into longer and you could get some nice prizes in the meantime.

[Investor]

Thank you very much for such a fabulous array of suggestions, some of which I hadn't considered at all.

We live in very odd times and it's hard to get a decent return in anything other than perhaps equities and P2P (which are not suitable for me, as I'm looking to invest short term). The suggested investment options don't seem to give a return that match up with nevermind beats inflation. Is there any fairly safe short term investment that can give even, say, 4% (per annum)?

[swill453]

The suggested investment options don't seem to give a return that match up with nevermind beats inflation. Is there any fairly safe short term investment that can give even, say, 4% (per annum)?

I think that's been answered already (the answer being "no"). Unless your definition of "fairly safe" is at the "not very" end of the spectrum.

Scott.