Q. My wife and I are about to complete the sale of our house next month but haven’t found a new property to buy yet. We’re planning to stay with my brother to avoid breaking the chain. This means we’ll have approximately £370,000 in cash while we search for our next home. We don’t want this money to sit idle in a current account for at least three months. We want low-risk options that don’t involve the stock market. We’re both higher-rate taxpayers, but we’re okay with paying taxes as long as our money is actively working for us. Where should we put our funds while waiting to buy again? Thomas, Windermere

Anna Bowes Replies

It’s wise to seek a return on your money while house-hunting, and since you’ll need access to it short-term, cash savings are advisable.

Despite the Bank of England cutting the base rate to 5 per cent, savings rates of 5 per cent or more are still available.

Choosing the right account for such a large sum can be challenging.

The top paying three-month fixed-term bond is with Israeli bank Mizrahi Tefahot, offering 5.19 per cent via the Flagstone platform. It’s covered by the Financial Services Compensation Scheme (FSCS), protecting up to £85,000 per person per banking licence if the bank fails.

However, fixed-rate bonds usually don’t allow access before maturity. On a £370,000 deposit, you could earn about £4,800 over three months, which would exceed your tax-free personal savings allowance.

If early access is needed, the Principality Building Society’s online triple-access account offers 5 per cent AER. This account allows only three withdrawals per year, which could suit your needs, as you’ll require the funds just for buying your new home.

Read terms and conditions carefully, as after three withdrawals without closing the account, access isn’t available until the next calendar year.

Other restricted access accounts may simply lower the rate after penalty-free withdrawals but won’t deny access to funds.

Consider a notice account, which requires a notice period before funds can be accessed. Investec Bank’s 90-day notice account offers 5.25 per cent. To ensure access after three months, consider giving the notice period soon after opening the account.

Easy-access and notice accounts have variable rates, so interest could change. But if access needs are uncertain, these options may be cost-effective.

With a large sum of cash, consider how much is protected if the worst happens. Besides £85,000 protection, the FSCS protects temporary high balances up to £1 million for six months from the date of credit, covering events like house sales.

Finding the right savings account with the highest interest rate and suitable access is crucial.

Anna Bowes co-founded the consumer website Savings Champion in 2011 and has over 30 years of financial services experience.