Natwest Capital Protected worth it?

hamage

Very new to investing...
Been looking at natwest's capital investment fund which runs out next week - should I be thinking the 10% per year is a good thing for someone to be offering, or is now a crazy time to be investing. I'm fairly happy about locking the money away for 5 years if it's going to get a good return - but obviously no guarantee, and I suppose my money could be worth a lot more after 5 years, even though I get the same amount back.
http://www.natwest.com/personal/investments/g1/capital-protected.ashx
Any help much appreciated!

slopemaster

I don't see where it says 10% per year?

slopemaster

unless you are dividing the 50% by 5 yrs but
1) that is a MAXIMUM, and
2) it comes out more like 9% per year or even less

hamage

You're right - the 10% isn't listed on the site - does that make it suspect? That was definitely how it was explained to me. What do you mean about the 9% though? Does this mean it's not so good. Is the fact there's a maximum so low suggest it could do quite well?

slopemaster

hamage wrote: »

What do you mean about the 9% though??

Compound interest
If you earned 10% a year for five years, it would add up to about 60%, not 50%, because you would get interest on the interest.

hamage

So, what do you reckon? Any good - I mean at this time it seems quite likely it could make a decent percentage over a sizeable time like 5 years?

slopemaster

You can get a list of guaranteed equity bonds up on moneysupermarket and try to compare the different ones.
I think this one sounds pretty crap, personally, as 50% over 5 years is the MAX you can get, but some others guarantee around this much if fTSE index doesnt fall over the 5 yrs - see B'ham Midshires thread.

But then, I'm a beginner myself.
But mebbe you need to do a bit of research as it sound like someone's trying the hard sell on you.

And at the end of the day, if you dont really understand it, then prob better to just put in a building soc account with best rate you can find.

(Unless v big amount in which case go to INDEPENDENT adviser - not one at the bank.)

dunstonh

50% is not 10% a year. You are getting investment advice from a tied insurance agent. That is not a good thing to do.

Better products exist. Just not at Natwest. You can get at least 11.5% if that is what you really want.

slopemaster

dunstonh wrote: »

You can get at least 11.5% if that is what you really want.

OK I bite.
How?

dunstonh

slopemaster wrote: »

OK I bite.
How?

See a real financial adviser. Any local IFA should be able to help.

That is one of the provider rates available at the moment. I dont know if its the best one. I suspect it isnt but I saw the terms on it the other day and it clearly is better than Natwest. So, without research, I know its better. I suspect with research there will be better still.

slopemaster

Funnily enough, I thought that may be the answer ;-)

(I am actually considering it, but no harm in trying to be informed anyway)