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Anyone know anything about the new 5 yr ISA from Cheshire Building Society
zzzLazyDaisy
Posts: 12,497 Forumite
The Cheshire Building Society has a new 5 year ISA. The returns are linked to the stock market but there is no risk to capital, a guaranteed 14.25% interest if the account is held for the full 5 years, and the prospect of up to 10% interest per year depending on stock market performance.
According to the girl in the BS, you can transfer in previous year's allowances, and there is a 1% bonus for people signing up this month.
It started yesterday, but there's nothing on the website and I can't find anything about it
Anyone know anything? Or better still have any comments? I would quite like to invest in the stock market, but am very risk averse as I am 50 and already retired owing to illness, so I can't afford to run risks with my capital.
According to the girl in the BS, you can transfer in previous year's allowances, and there is a 1% bonus for people signing up this month.
It started yesterday, but there's nothing on the website and I can't find anything about it
Anyone know anything? Or better still have any comments? I would quite like to invest in the stock market, but am very risk averse as I am 50 and already retired owing to illness, so I can't afford to run risks with my capital.
I'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.
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Comments
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14.25% over 5 years is about 2.85% per year (not bothereing to work out compounding).
How is it linked to the stock market? FTSE100, FTSE250 etc. Do you get full gains or just a %?0 -
I've just had some spam snail mail from them for fixed rate and escalator bonds but nothing about an I.S.A. They're a day late anyway, I bought mine yesterday.
The guarantee of 14.25% ovet 5 years, I don't reckon is all that clever, just over 2 and a half percent p.a. ! for the cream on the cake you are at the mercy of the stock market, no doubt someone on here offer an educated guess (if prompted) of where they think the market will be in 5 years time.
Timing is crucial I have found for stock market gains, it would be a bit of a bummer if the Footsie peaked in 4 years time and then slowly declined for the final year, you would only be able to have a look at what you could have won.0 -
This is the info for last year's offering. Apparently the basic info is very similar for this year's
http://www.thecheshire.co.uk/AdditionalServices/guaranteed_capital_plus.aspI'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.0 -
The link doesn't explain very much (no surprises there - it is Cheshire BS :rolleyes: ).
Most commentators on MSE agree that these guaranteed investments come at too high a price.
You don't get the dividends.
You come out of the stock market at a fixed time - which might be just the wrong time - and have to incur re-entry costs if you want to continue participating.
ETC. ETC.
Search on MSE for "guaranteed equity bonds" or "guaranteed investments" to get the full arguments.
In this case, no-one can make a judgement until we know what % of any increase in the FTSE you are entitled to, and what other conditions apply.
The site really needs a sticky at the top of the savings board about these products, but perhaps because Martin has "recommended" a Post Office GEB (Guaranteed Equity Bond) in the past, the issue has not been addressed - and so the keyboards have to see more wear and tear.0
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