Savings and Investments
Most people will have some form of savings or investments in place. These can be for a specific purpose, like paying for your children’s education, or to supplement your retirement, or you may already have a lump sum that you want to put aside for the future.
Currently, deposit rates aren’t as attractive as they once were, but there are alternative options available. It might be time to look into a longer-term plan for your investments. Longer-term investment plans typically involves some element of risk. While the majority of investment products involve an element of risk, over the long term they may give you a better return than a simple savings plan.
When deciding which investment suits you best the following have to be taken into account:
- Your attitude to risk
- Your preferred time frame
- Do you require an income from your investments
There are many different types of savings and investment products on the market, each with varying levels of risk and return. At TAB Financial Services we provide impartial advice to maximize the returns on your investments. Set out below you will find some of the main types of savings and investment products we can offer advice:
These vary by what the particular fund invests in – whether it’s shares in top multinationals, large commercial properties, fixed interest securities issued by Governments and large companies or deposits.
Some funds may invest in just one type of asset, for example, an Equity Fund which only invests in shares in top multinationals. Other funds, referred to as Managed or Mixed Funds, invest in a mix of shares, property and fixed interest securities.
These bonds typically lock up a lump sum for a term of about five years. At the end of the term your initial lump sum investment is usually capital secure and you will get back at least your original investment (or a high percentage of what you invested, such as 90%), together with a bonus related to the growth, if any, in one or more stock markets or in the shares of certain large multinationals. If the particular stock market or shares to which the bonus is linked, do not increase in value over the term, there is no bonus payable at maturity and in this case you would get back your initial capital sum only, which would typically be the amount you invested.
These deposit accounts are typically for a set period of time at a fixed rate of interest that would be generally higher than interest rates offered for regular savings accounts. By investing your money in one of these accounts you understand that you cannot access your money during the fixed term. Deposit accounts are low in risk but they tend to produce low returns over the longer term.
Long Term Savings Plans
These plans are available from life assurance companies. They accumulate a capital sum over the longer term from regular monthly savings. The recommended minimum term for plans such as these is five years and your savings are typically invested in managed funds as outlined above.