Business Savings Accounts

jaygee_2

I have funds locked into a limited company maturing from a business bond early next month c£150k and need to find a home for them.

Current rate is 3% and there doesn't seem much available and not keen to take the funds out for personal investment at present in view of the tax implication.

I have no need of them within the business so can invest 3 to 5 years without problem.

Any suggestions?

I did find a 3 yr term at 4% through L&G with funds lodged at Ulster Bank (RBS).

See http://www.fairinvestment.co.uk/rbs_the_royal_deposit_plan_fixed_business.aspx

Are there any hidden dangers with this?

Any advice would be welcome.

Lokolo_2

Well quoting from the product page with the features, it says

* The return of your capital depends on the ability of the counterparty (Ulster Bank, a wholly owned subsidiary of RBS) to repay the monies.

So it very much depends on the stability of RBS, if they go bust you may get nothing at all back, unless the £50k savings guarantee per instituition applies here.

The 4% for 3 years seems reasonable considering the amount you are investing :T

jaygee_2

aaronmanz

Thanks for the reply.

As Ulster are a 100% subsidiary of RBS and they are 84% Government owned I suppose I should take confidence.

I'm always confused whether a company as a single entity will still benefit from the £50k FCSC - can anyone comment?

I notice I can get a 0.75 discount at http://www.moneyworld-ifa.co.uk/Income_Bonds/RBS-UK/Royal-Deposit-Plan/index.htm

This does seem quite attractive but I still feel uncomfortable.

Why? I must be missing something!

opinions4u

I have no need of them within the business

So why keep them in the business?

You may have good reason, but I can't for the life of me understand what.

I'd speak to your accountant about the most tax efficient way of drawing the funds out of the business (e.g. dividends) or perhaps devise a plan where the business uses this capital to actually make real money - like businesses usually try to do.

jaygee_2

opinions4u

Thanks for taking the time to post.

Having just hit the half century I'm looking to take it a little easier and spend more time on the golf course and with the kids before they're off to uni in the next few years.

Worked hard over the last 25 years so have a reasonable asset base and no debts so only take the minimum from the biusiness and already top up with divs to keep myself and the wife just below the higher tax limit. The business already returns good profits and life is very much a balance. The old adage "do you work to live or live to work" comes to mind.

I could put the money to work in the business but to be honest have more than enough working capital and value time more than increased income. My "problem" is I currently have a lot of cash and need to find a relatively safe place with a return at least to match inflation. In view of recent events I'm looking for spread as well which is becoming more difficult.

Hope that explains matter but if you have any more thoughts I'd be interested to hear them. What did you thing of the RBS investment?

Jungle_bunny

I have just applied for this through Fair Investment, after seeing your link and speaking to moneyworld it seems I can get a 0.75% cashback. Anyone know if it's possible to cancel an application and re-apply to benefit from this? Am I missing something?