What interest rate are you getting on your savings today? Unless you are enjoying fixed rates that were agreed in the distant past it is likely that you are getting a paltry return of less than 0.3%. That is even less than the modest inflation figure for the year to June 2018, so in effect your money has lost value. Corporate investors are actually getting negative returns on their surplus funds from the main banks!
Ironically, Credit Unions across the country have become a victim of their own success in attracting depositors and those with substantial deposit bases have now been forced to place a limit on the amounts their members can place in their accounts, typically €30,000. This is due to regulatory requirements that Credit Unions maintain a percentage of their deposits by way of reserves and, with interest rates so low this has a high cost, which is affecting member dividends.
Whether because of low bank rates or credit union account limits, ordinary savers are now looking for secure alternatives.
When looking at alternative investment products there are many important considerations, the mains ones being Return, Risk, and Accessibility. All of the leading financial institutions offer standard products across a diverse range of asset classes. There are also Structured Products, some of which carry guarantees, whereby some or all of your capital is guaranteed. These will usually pay out a pre-specified return in the event that the performance of underlying assets achieves preset levels.
Investors must be careful to select products that are suitable to their specific needs and one should always be wary of products offering spectacular outcomes. If it looks too good to be true then it is too good to be true.