Comparsion of three deposit funds - INVESTEC and SOC GEN

veryintrigued

Thanks to the couple of replies so far - they are much appreciated.

I had hoped for > than 2.3% return when I took this out.

I realise the risk and to get better than the 2.3% (from the plan) I would need the plan to pay out twice more.

I have a spreadsheet which I update when I can. Currently the FTSE is 6.77% away from breaching the top level with 52% of the working year gone. I know it only has to breach this level one day etc etc.

Maybe from my niaive perspective I thought the letter was from a 'the FTSE is flat we could lose out big time here ' perspective from Soc Gen - so lets try and get rid of customers. So its good you've given me other things to think about>

The difficulty I have is if I did take the offer where to put the funds - I have stacks of Regular Savers, current accounts. The next one I would look at is the Tescos CA - but for a 3% I might be minded to leave the plan in place.

Any more thoughts are always welcome while I mull over.

Thanks again

PS I've pasted the boundaries of the plan for the first 5 years for it to pay out from my spreadsheet - I'll have to add the 6 year!!

Within year 1 5439.26- 6922.6
Within year 2 5253.83 - 7108.1
Within year 3 5068.4 - 7293.55
Within year 4 4882.97 - 7478.99
Within year 5 4697.54 - 7664.41

veryintrigued

Final update on this one.

After having a think and reminding myself that the broker increased my inital outlay by 2.5% it makes it a lot more appetising. i.e. the actual % I get back over circa 18 months will be over 4%.

Hence I'll be going for the closing of this plan.

Thanks again to those who helped in this decision.

planteria

gadgetmind wrote: »

It's this low rating that puts me off using INVR as an interest rate hedge, but it's still tempting.

would you mind explaining this further, please gadgetmind?

gadgetmind

planteria wrote: »

would you mind explaining this further, please gadgetmind?

Well, it's great making a geared investment/bet on interest rates rising, but not if the company issuing the bond hits hard times and you lose the lot!

planteria

thanks, but what would you have done if you were happy with Investec's credit rating?

gadgetmind

When I looked at buying, the yield was just over 4%, which was very low given the credit rating of Investec. (It's now even lower as base rates haven't shifted but people clearly expect that they will.)

Even so, I did look at buying, but this would have required a "proper" broker as spreads were vast (still are) due to low liquidity.

planteria

thanks again, sorry..what did you look at buying?

gadgetmind

INVR - Investec floating rate preference shares. Yes, an odd beast as most of these floating rate issues are bonds/notes.

http://monevator.com/floating-rate-bonds-as-a-hedge-against-rising-interest-rates/

planteria

thank you. apologies for being slow to follow.. & yes, im not sure i see a place for them in my portfolio either;)