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Basic Question: Marcus vs. FTSE 100 Dividend

londontutor1987
Posts: 4 Newbie

Hi,
I am new to investing and new to this forum.
Marcus Easy Access savings account pays 1.3%and a FTSE100 Tracker Fund pays approximately 4.5% return in dividend per year, provided this is held in a Stocks and Shares ISA (£20k per year).
In terms of earning per annum, Marcus (£260) and FTSE Tracker (£900) - This is a huge difference.
I would like peoples opinions why people would prefer the Marcus vs. Tracker.
Obvious assumption is that you should be able to sell the tracker at the price you bought it for, and there are some small fees to maintain the tracker.
Thanks in advance for your opinions!
I am new to investing and new to this forum.
Marcus Easy Access savings account pays 1.3%and a FTSE100 Tracker Fund pays approximately 4.5% return in dividend per year, provided this is held in a Stocks and Shares ISA (£20k per year).
In terms of earning per annum, Marcus (£260) and FTSE Tracker (£900) - This is a huge difference.
I would like peoples opinions why people would prefer the Marcus vs. Tracker.
Obvious assumption is that you should be able to sell the tracker at the price you bought it for, and there are some small fees to maintain the tracker.
Thanks in advance for your opinions!
0
Comments
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londontutor1987 said:Obvious assumption is that you should be able to sell the tracker at the price you bought it for4
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londontutor1987 said:a FTSE100 Tracker Fund pays approximately 4.5% return in dividend per yearlondontutor1987 said:Obvious assumption is that you should be able to sell the tracker at the price you bought it for,poppy103
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londontutor1987 said:Obvious assumption is that you should be able to sell the tracker at the price you bought it for
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londontutor1987 said:I would like peoples opinions why people would prefer the Marcus vs. Tracker.
FTSE tracker - capital at risk
Well balanced, diversified investment portfolio rather than investing in one market - Capital still at risklondontutor1987 said: Obvious assumption is that you should be able to sell the tracker at the price you bought it for, and there are some small fees to maintain the tracker.
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If you assume that a FTSE 100 tracker yields 4.5% and that you can sell it for the same price that you bought it, then you are correct but only in the trivial sense that 4.5% is more than 1.3% but we knew that already and as others have said your assumptions are facile.
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londontutor1987 said:I would like peoples opinions why people would prefer the Marcus vs. Tracker.2
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Every time a dividend is paid the value of the share price goes down by the same amount. So all things being equal, comparing those two examples, Marcus pays you £230 interest and then you get your 20k back. The FSTE 100 pays you £900 and then you get £19.1k back. The only way the FSTE pays more than Marcus is if the share price also grows during the year, which is more likely than not but far from sure.4
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For the reasons the Op describes it makes no sense to be keeping significant amounts of money in savings accounts, rather than sensible investments such as stock market trackers, unless there is a very good reason why they can't accept the risk of short term volatility (for example a need to use the money for a particular purpose within the next 3-5 years).0
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Prism said:Every time a dividend is paid the value of the share price goes down by the same amount.
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Improbable that the FTSE 100 is going to yield 4.5% over the next 12 months. What's the source of your information?0
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