Savings

[wendymunro]

Which savings account do you recommend for living off the interest of �96000.00 whilst the capital stays at that amount?

[factor-fiction]

Interest of over 6% in a good high paying account will give you around �6000 pa before tax. Depending on other income you'd pay income tax on some or all of that. Although your capital would stay at that amount it would be falling in value in real terms by around 4% pa due to inflation

[Jenga]

Best to invest it in property and rent it out. Bank's don't give you much interest on the whole.

[Whoever]

Many building societies and banks offer one or two year fixed rate savings bonds. Icesave (if you are prepared to use an internet bank) offer, 6 mos, 1 year and 2 year options at a competitive interest rate, and interest can be paid monthly or yearly. Fixing for a year or more will at least ensure that you know what your income is going to be over a given period, especially at the current time when we have a lot of interest rate instability.
Check out moneysupermarket.com or moneysavingexpert.com or Google "Fixed Rate Savings Bonds" to find the best deals. And if you're a taxpayer, use up your �3000 Cash ISA allowance every year as this income will come tax free. (The cash ISA allowance increases to �3600 a year after April 5th).
Over the long term if you relying on income from cash savings, the value will be eroded by inflation. Your existing capital value will remain unchanged, but if inflation increases by 5% a year, every year you will be able to buy less and less for your money. If you can risk investing a modest part of this sum on the stock market via unit trusts (wrapped up in an equities ISA) this will help to protect the value of your investment. You can choose unit trusts that pay out income, rather than having it reinvested in buying extra units. The other alternative is index linked national savings certificates but you have to hold them for several years and you only get the interest when they mature.
I'd stay well clear of property at the moment. Unless you live in a very cheap area you will not get much for �96,000 and if you plan to let it out to tenants and then have empty periods, you won't make much money.

[helpmetoo]

6%? mean18.co.uk