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I will soon inherit some money and planning to add it to my savings account, with Kent Reliance.
The amount I currently hold is within the Financial Services Compensation Scheme (FSCS) limit of £85,000, so I should be protected if Kent Reliance went bust.
But what if my inheritance pushes me over the limit?
C. Milton from London
'Your money is safe - for six months at least'
Joanne Padilla, Which? Money expert, says...
To recap: the Financial Services Compensation Scheme will step in if banks and building societies, insurers and some investment providers go out of business.
You’re correct that the normal deposit protection limit offered by the FSCS is £85,000 per individual, per financial institution (some banks share protection).
However, there is an additional limit for temporary high balances in certain circumstances – for example, proceeds from the sale of your home, an inheritance or an insurance payout.
This extends the limit to £1m for six months, and it is separate from the original £85,000 limit.
There is an additional limit for temporary high balances in certain circumstances
Note down when your six months will expire and transfer the money elsewhere.
If you don't need it soon you could put it in fixed rate savings accounts to get a better interest rate.
Be warned that keeping large sums in savings accounts over the long term runs the risk of your money growing slower than inflation, while getting taxed on the interest, if it's not in a cash isa.
Depending on how much you've inherited, and your financial situation, you might want to use the money to pay off debts (the interest payments on which might outweigh savings), invest it for higher returns or pay into your pension, potentially benefitting from tax relief.
- Find out more: Best savings acco
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