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Safe fund beating savings accounts?

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Safe fund beating savings accounts?

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sebtomatosebtomato Forumite
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Hi,
I am only getting 1.2% or 1.3% on my savings currently.
Are there any investment funds (preferably available via HL or Vanguard) that can beat those savings rate (e.g. 2%) while staying fairly safe with the capital?
Any recommendations on some safe funds?
Thanks
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Replies

  • glider3560glider3560 Forumite
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    No fund offers guaranteed returns.
    No fund is 100% safe.

  • kinger101kinger101 Forumite
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    There aren't any 100 % safe funds.  You need to assess your capacity and attitude to risk and allocate between savings and investments accordingly.  If it's saving for a house, or you need in in the next <5-7 years, then you need to stay in savings accounts fully backed by FSCS or Treasury.  If you don't need the money for 10 years, then the savings accounts are arguably more risky, as you know inflation is going to eat around 1% of their value every year.  

  • kuratowskikuratowski Forumite
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    You could also consider going 50-50, that is, keeping 50% in savings accounts for "safety" and investing 50% to improve the average return.  Or whatever split you feel comfortable with.
  • edited 28 May at 8:40AM
    sebtomatosebtomato Forumite
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    edited 28 May at 8:40AM
    Yes, I know no funds are as safe as savings accounts.
    However, some funds are more risky than others, and some funds must have performed well during the recent crisis while still giving small returns (e.g. 2% pa).
    I am ideally looking for something that doesn't swing too much, and has moderate returns above savings account.
    I already have a lot of riskier stock market investments, but currently with £50K of cash sitting on savings account earning basically nothing. I don't need that much in short term access.
  • SFindlaySFindlay Forumite
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    sebtomato said:
    Yes, I know no funds are as safe as savings accounts.
    However, some funds are more risky than others, and some funds must have performed well during the recent crisis while still giving small returns (e.g. 2% pa).
    I am ideally looking for something that doesn't swing too much, and has moderate returns above savings account.
    You clearly don't understand, there is NO magical fund like you are seeking, don't you think everyone would be investing there if there was?!?!? 
    Stick with the 1.2 or 1.3 % that you're getting and research investing until you understand the risks and accept there is no fund that will guarantee you a better rate than your savings accounts.  
  • ColdIronColdIron Forumite
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    Don't forget that even were you to find that mythical safe fund that returned 2%, HL and Vanguard will charge you a platform fee of 0.45% or 0.15% thus reducing the return
  • AlbermarleAlbermarle Forumite
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    RCI bank are offering 1.8% on a 5 year fixed rate , which is about as close as you will get to what you want.
  • sebtomatosebtomato Forumite
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    How depressing. So to have a chance to earn 2 or 3% returns per annum nowadays, you need to be willing to have capital going down by 10%??
    What's left for investors? 

  • sebtomatosebtomato Forumite
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    RCI bank are offering 1.8% on a 5 year fixed rate , which is about as close as you will get to what you want.
    Thanks, but I don't want my "savings" to be stuck for 5 years just to earn 1.8%. Doesn't seem to be a good return. 
    If I wanted to lock the money down for 5 years, I think I would just drip feed into the stock market, and probably would have a high chance of earning the same amount (or more).
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