Share ISA that basically acts as a fixed rate cash ISA

mollycat

stg123 wrote: »

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

He's quite sensibly NOT going to give you examples.....in case you construe it as advice.

You could do your own research now that you know what youre looking for?

stg123

I'm not sure that makes any sense.

He has replied with one sentence answers and multi-sentence disclaimer.

There hasn't been any content yet in what he has said, so what could I search for?

I've already considered the concept of a fixed return share ISA.

A Google search of a "Fixed Return Share ISA" gets us nowhere:

http://!!!!!!!.com/d4up6c9

which to save you time says "No results found for "Fixed Return Share ISA"

I've already Googled the hell out of this and come up with diddly squat.

Moneysupermarket has 7 sections of share ISAs, none of which are Fixed Return.

http://www.moneysupermarket.com/investments/stocks-shares-isas

Are you saying you're aware of such a product, or are you just here to insist I don't ask for advice on a forum?

le_loup

You're very aggressive for someone who knows little and is ostensibly looking for help.
You have already been told that nothing meets your requirements.
Look up Corporate Bonds. When you have done so and want specific help based upon your research, come back for any clarification you may require.

stg123

Hi

Thanks for coming back to me.

I'm only really interested in a product with as close to a fixed return as possible - I'm not really interested in ETFs. I don't want to play the stock market, or the corporate bond market, really.

Dunstonh said:

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

but these really don't seem to be standardly available products.

I suspect that Dunstonh is correct, that these will be knock outs based on FTSE performance or some such thing, but it would be good to see one actual example.

le_loup

stg123 wrote: »

I'm only really interested in a product with as close to a fixed return as possible - I'm not really interested in ETFs. I don't want to play the stock market, or the corporate bond market, really.

Then you are beyond help!

xylophone

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

I think that he might have in mind the stock market linked growth plans offered by some banks and building societies? http://www.thisismoney.co.uk/money/saving/article-1700960/Is-this-18-savings-account-rate-real.html


http://www.nationwide.co.uk/NR/rdonlyres/DE0B7857-4C6A-4FFF-8537-DEB1BA11AD57/0/PEBISAKFD.pdf

dunstonh

As a regulated individual, I cannot recommend products on a forum. Generically, SCARPS could give a fixed return subject to certain growth targets being met and solvency of the provider. However, they are typically only suitable for no more than 25% of investable assets and you wouldnt want to put more than 10% with any one market counter party.

I'm only really interested in a product with as close to a fixed return as possible - I'm not really interested in ETFs. I don't want to play the stock market, or the corporate bond market, really.

Which effectively means you dont want to invest. That leaves you with deposit based products subject to inflation risk and shortfall risk.

jimjames

stg123 wrote: »

Hi
I'm only really interested in a product with as close to a fixed return as possible - I'm not really interested in ETFs. I don't want to play the stock market, or the corporate bond market, really.

but these really don't seem to be standardly available products.

which to save you time says "No results found for "Fixed Return Share ISA"

There is a reason these aren't standardly available products because they are a contradiction in terms. Investing gives rise to risk, deposits don't. If you want risk free then you are looking at savings not investments. Google doesn't return results as share based funds do not have fixed returns.

You've not given any indication of age, savings etc to explain why you aren't interested in any of the options above. It isn't a case of being all or nothing, you can mix amounts so that the balance gives you something that matches the risk you want to take.

SalsaDanca

Hi Stg123,

HMRC know that people want to get around the cash isa limit by trying to use a stocks and shares ISA like a cash ISA, and they've put rules in place to prevent such behaviour. The ISA Guidance Notes for ISA managers refer to the "5% Rule" - put simply, this rule means that an investment is not allowed to be held within a stocks & shares ISA unless there is a possibility that you will lose at least 5% of your capital. Other users have already explained that an investment that guarantees to return your capital in full, with interest, isn't really an investment. However, if you do managed to find such a product, you won't be allowed to buy it using your stocks and shares ISA allowance. If you're determined to use this allowance, you're going to have to accept at least a small level of risk.

Stocks and shares ISAs are permitted to pay interest on uninvested cash held within the ISA, but HMRC have thought of that as well and they now take a 20% charge from any interest earned.

It's also important to note that when it comes to investments, the FSCS does not compensate for loses due to poor investment performance.

Sorry if that's not what you want to hear.

jamesd

There are two mandatory requirements for investments within a S&S ISA: the 5% rule that SalsaDanca has explained and a minimum of five years until maturity for any individual corporate bonds held within the ISA at the time they are purchased.

If you want something that is fairly sure to pay you back a fixed amount in five years, you could buy gilts or similar government bonds issued by other EU countries. Unless the government defaults you'll get the specified amount of money back at maturity and the interest payments along the way.

Don't expect to get a good interest rate from gilts at the moment, you're quite likely to have to buy with a locked in capital loss, that is, at a price higher than the maturity value.

If you relax the fixed rate of return requirement, there are funds like Invesco Perpetual Distribution that may be suitable. Or maybe a commercial property fund. But note that such funds have capital value variations and you may not want that.

As a higher rate tax payer you might consider just holding cash in any S&S ISA that pays a half-decent interest rate, because it will only have a 20% tax charge, not income tax due on it. Or you might consider Premium Bonds, which can sometimes be reasonably competitive for higher rate tax payers, even though they lack any guaranteed rate of return.