Saving for a rainy day makes good financial sense and investing wisely can really make a difference
Why are we encouraged to save money?
From childhood most of us are told to put away money to save for the future. Whether you place your money in a piggy bank, or in a multinational investment house we are all aiming to provide for our future needs and to protect ourselves against unexpected causes of expenditure.
Savings are generally funds that can be set aside but accessed relatively easily, whereas Investments tend to be longer term products that might typically be invested for 5 years or more.
Either way it is vital that you seek out the best advice to ensure the savings and investment products you consider best fit your needs and risk profile. The Profit Key can help you cut through the jargon.
Sometimes your best investments are the ones you don’t make.
Savings and Investment Products Savings and Investment products range from a simple current account, which allows a small amount of interest, but facilitates regular payments and withdrawals without detriment to your savings.
At the opposite end of the scale would be company shares, where you invest money in a company, with the prospect that the company will prosper and the shares will increase in value over time. Whilst the benefits are potentially high, the risks are also much greater.
Bank Accounts Current accounts may offer very low rates of interest but can be the most flexible way of accessing your money at short notice. They can pay higher rates of interest if you are willing to give the bank a longer notice period before withdrawing your cash.
National Savings & Investments These products are backed by the government and can therefore sometimes be considered lower risk, some may also have a tax free element available.
Bonds and Gilts These are generally considered lower risk than direct equity (share) investments, although the value can still fall as well as rise. The interest or yield from these products generally varies with the levels of quality of the investments held.
Property ‘Bricks and Mortar’ investments, like other investments, can increase or decrease in value but may offer the prospect of increasing in value over time and provide a possible rental income too.
Equities (Shares) Over the long term, equities have historically offered better returns for investors but nothing is guaranteed and the returns you get will largely depend on how the individual companies fair within the portfolio.
Investment Funds Specialist investment managers may often invest in a fund (a pool of investment products) in one or more of the categories above with the aim of maximising the return on the investment but diversifying the risk. There are hundreds of investment funds available, each with their own specific aims and objectives, so it is wise to consider all the options.
The Profit Key help you cut through the jargon and guide you to the solutions available that best suit your individual circumstances.
We will be able to explain risk to you in more detail. Contact your financial advisor before making any decisions.The value of investments may fall as well as rise. You may get back less than you originally invested.
The Financial Conduct Authority does not regulate National Savings & Investment products.
The Profit Key has a strategic partnership with Foxbridge Independent Financial Solutions Ltd which is Authorised and Regulated by the Financial Conduct Authority. Financial Services Register Number 456481. Registered in England & Wales, Company Number 04522310. Registered Office address: Prince William House, 10 Lower Church Street, Ashby De La Zouch, Leicestershire, LE65 1AB. Trading address: Chapel House, 65 The Hill, Kirkby In Ashfield, Nottingham, NG17 8JS. Telephone: 01623 750839
The guidance and or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted to customers in the UK.