Will my home sale proceeds be protected in my checking account? | property

Q I ponder within the occasion you might also assist me. I will shortly receive the proceeds from the sale of a second home and am concerned that the funds shouldn’t be going to be protected after they attain my checking account. The conveyancer will solely deposit the funds in a single account and it may take time to divvy up and ship the money to completely totally different accounts. Would possibly you provide any advice please?

A If the sale proceeds are better than £85,000, the amount over that limit shouldn’t be going to be lined by the Financial Suppliers Compensation Scheme (FSCS), which protects deposits held in a monetary establishment, establishing society or credit score rating union account must the financial institution go beneath. Nonetheless, if the proceeds had come from the sale of your major residence, you will have gotten the advantage of the security of what the FSCS calls “non everlasting extreme balances”. This extends FSCS security to as a lot as £1m for six months and it applies not solely to money from the sale of a home however along with totally different life events that will create large sums equal to a payout for voluntary or compulsory redundancy, a divorce settlement or an inheritance, amongst others.

It might be time-consuming nonetheless in the event you want to be sure that your whole money is FSCS protected, it’s a must to to divide the sale proceeds by 85,000 and use the result to seek out out what variety of monetary financial savings accounts you wish to open. To allow for curiosity most likely taking your monetary financial savings over the £85,000 limit at each institution, I like to recommend that you just put £80,000 into each account comparatively than the whole £85,000.

It is also worth checking that you just would not have better than £85,000 in accounts inside a banking group that holds the “deposit-taking license”. That’s because of the FSCS security is restricted to £85,000 a license not per branded account. So, as an illustration, when you have got a number of account with banks that are part of Lloyds Banking Group – which contains the Monetary establishment of Scotland (which holds the license), Birmingham Midshires, Halifax and Intelligent Finance – security is likely to be restricted to £85,000 all through all the accounts. The an identical is true of various members of Lloyds Banking Group – Cheltenham & Gloucester, Lloyds Monetary establishment Private Banking and Scottish Widows Monetary establishment – which all perform beneath the license held by Lloyds Monetary establishment. Positive, it is sophisticated nonetheless you’ll uncover out further on Moneyfacts’ who owns whom? pages.

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