Bit of advice needed

Justamum

My MIL lives in South Africa, but wants to invest some of the money in the UK (or the Isle of Man where she has a bank account). She has about R500,000 (which is about £34,000) plus about £30,000 in the bank here. She is currently getting between 11% and 11.5% in SA on her money, which sounds brilliant! (It is taxable though) Are there any investments in Britain which will give her returns at anywhere near the same amount? I'm thinking not, but as I spend most of my time on the Old Style boards I'm not very au fait with investments!

She's looking for risk-free, 100% capital guarantee for, say, 5 years - no risks but good growth. Is there any such thing?

Many thanks.

Moon_Boi

Justamum wrote: »

She is currently getting between 11% and 11.5% in SA on her money, which sounds brilliant! (It is taxable though) Are there any investments in Britain which will give her returns at anywhere near the same amount?

You've got no chance of anywhere near that in the UK, unless it's a Ponzi scam.

unhealthyman

Another question to look at when comparing the rates is looking at how the Rhand is doing compared with other currencies (of which I have no idea). The point being, getting 11% in SA, if their currency is dropping in value, does not mean it can really equate with UK rates. Adding the variations of currency markets makes this a rather more complex question. Whether her money will do better here at mediocre rates of interest, or in SA at better rates of interest is quite difficult to answer, although if she plans to spend much of that money in the UK any time soon, then there is a certain stability in keeping that money in the UK rather than the SA.

(As a similar point, my brother is currently studying in Japan, getting two seperate student bursaries - one is in sterling, the other is in yen. Given the collapse in sterling, he has lost as much as 18% of his money over 2 days, which would quickly negate any interest in either account.)

Justamum

Moon_Boi wrote: »

unless it's a Ponzi scam.

What's that?

unhealthyman wrote: »

although if she plans to spend much of that money in the UK any time soon, then there is a certain stability in keeping that money in the UK rather than the SA.

She will never return to the UK. If she leaves SA (which is doubtful) she would go back to Cyprus where she is from originally, but it's unlikely she will leave SA. She's looking, really, to secure my DH's inheritance (and our childrens')

unhealthyman

Justamum wrote: »

What's that?

http://en.wikipedia.org/wiki/Ponzi_scheme
It's a type of investment scam which again happened with a guy called Madoff, a 'respected' investor, who was offering incredible (i.e. too good to be true) returns, which turned out to essentially be one big pyramid scheme. The poster was essentially being sarcastic because an 11% return is currently impossible in the UK.

Justamum wrote: »

She will never return to the UK. If she leaves SA (which is doubtful) she would go back to Cyprus where she is from originally, but it's unlikely she will leave SA. She's looking, really, to secure my DH's inheritance (and our childrens')

If the money she is going to invest/save is for inheritance to be spent in the UK, then the most stable way to invest it is in a lower paying UK account. (i.e. it will stay in track with the UK economy, so that 30,000 will stay as being worth around 30,000 plus whatever interest you can get here). If she leaves it in South Africa and the Rhand drops in value relative to the pound, then the relative value of the 30,000 will become less. It could also equally go the other way (especially with sterling being rather weak at the moment) and so she could get 11% plus any gains made from the rhand being stronger than the pound, but in that case she is essentially investing in currency, which is quite a complex and risky financial business.

Justamum

unhealthyman wrote: »

If the money she is going to invest/save is for inheritance to be spent in the UK, then the most stable way to invest it is in a lower paying UK account. (i.e. it will stay in track with the UK economy, so that 30,000 will stay as being worth around 30,000 plus whatever interest you can get here). If she leaves it in South Africa and the Rhand drops in value relative to the pound, then the relative value of the 30,000 will become less. It could also equally go the other way (especially with sterling being rather weak at the moment) and so she could get 11% plus any gains made from the rhand being stronger than the pound, but in that case she is essentially investing in currency, which is quite a complex and risky financial business.

Hmm. This is a tricky one then. My DH would dearly love to go back to SA - he hates it here! He will inherit not only the money that she currently has, she is trying to sub-divide her property and sell it off in pieces, then buy somewhere smaller for herself, so he will inherit more money plus a house. There is a possibility that we could end up going back there to live - we own nothing here and never will.