Share ISA that basically acts as a fixed rate cash ISA

stg123

Hi there

I'm a Higher Rate Tax Payer and I'm maxing out my Cash ISA every year, so I'm keen to make use of the tax free allowance that comes with the Share ISAs, in addition to this.

What I'd like is something with:

- Fixed rate of return
- Broker fees included in this rate
- Minimal need for me to get involved
- Coverage by the £85000 FSCS guarantee

Does such a thing exist?

jamesmorgan

I have similar requirements and tried to find something along these lines a year ago. In the end the closest I got was to purchase short dated corporate bonds within an ETF. This is a long way removed from what you have asked for, but I couldn't find anything closer. My motivation was different from yours as I already had the money within the Share ISA.

le_loup

Your description of your ideal S&S ISA is the same as a description of a cash ISA.
There is no such animal.

dunstonh

What I'd like is something with:

- Fixed rate of return
- Broker fees included in this rate
- Minimal need for me to get involved
- Coverage by the £85000 FSCS guarantee

No such product exists and cannot exist to meet that criteria.

stg123

dunstonh wrote: »

No such product exists and cannot exist to meet that criteria.

OK - is the £85k guaranteee the sticking point?

What about with just the first three criteria?

le_loup

No.
.........................

dunstonh

OK - is the £85k guaranteee the sticking point?

Investments are protected by the FSCS investment scheme. Not the FSCS deposit scheme. So, that is the first sticking point.

- Fixed rate of return

Fixed rate of return is another. You can get some fixed return products but typically they are linked to certain things occurring or being at risk in other areas.

- Broker fees included in this rate

Not possible. Explicit charging comes with investments. Not implicit charging that you are after.

stg123

Great stuff!

OK - so there' a 50k FSCS investment scheme I'd never heard of - covered here:

http://www.fscs.org.uk/what-we-cover/eligibility-rules/compensation-limits/

Do you know any examples of the Fixed Return products you mentioned?

I'm amazed something like this doesn't exist. Their closest competition for me is a savings account with something like 1.8% net interest.

dunstonh

I'm amazed something like this doesn't exist.

It wouldn't be an investment if it did. It would be a deposit and fixed term deposits do exist.

stg123

OK.

Do you know any examples of the Fixed Return products you mentioned?

stg123

Hmm - does anyone have any examples of Fixed Return S&S ISA products that dunstonh mentioned but didn't give any examples of?

Also - jamesmorgan - thanks for your response. How close to your ETFs get to achieving what you were looking for? What return do you get after broker fees/tax?