I would like to invest 200,000 in short term before buying a house?

Question

I do not owe anything on my house and I am selling it for 200,000 but before investing in another one, I would like to invest it for a year. would would the best way of doing that and how much would I get back in profit?

Answer 1

If only for 1 year then I would suggest either 6 month CD's or an interest bearing savings account.

1) See who has the best rates. Right now you can get around 5.5%
2) Open 3 or 4 accounts between different banks. a) there is the FDIC 100k limit and 2) sometimes banks won't give there best rate for large dollar amounts

Also review your personal situation. If you are paying interest on any loans or credit cards at more than 5.5% then you should pay those debts first.

Compounded monthly, at 5.5%, your profit would be $11,281.57

Answer 2

You should talk with a financial advisor. He will probably recommend (as I would) to invest some long term and some short term. You don't need to use all 200K to purchase your next home. Long term mutual funds have outperformed the real estate market.
You can get over a 5% return on a decent money market account. Then you can pull the the money out any time you want. That is where I would put my short term money.
Good Luck!

Answer 3

If I were doing this, I would put it in insured CD's, but be careful not to exceed the insured amount in one "bank." The money would be safe, and it would earn about 5% interest.

Answer 4

house prices are rising by £50 per day in the UK, buy again as soon as possible!