Deposit rates aren’t quite as attractive as they once were – and some institutions are now limiting the amount you can save – so what are the alternatives? At Gallivan Financial we’re committed to helping our clients find the perfect opportunity for them. Here are some of options you might want to consider.
• Fixed-term deposits: these deposit accounts are usually for a fixed period of time at a fixed rate of interest that would be generally higher than interest rates offered for regular savings accounts. The risk is low with this type of investment but the rewards also tend to be low.
• Investment funds: these vary by what the particular fund invests in – whether it’s shares in top multinationals, large commercial properties, fixed interest securities issued by Governments and large companies or deposits.
Some funds may invest in just one type of asset, for example, an Equity Fund which only invests in shares in top multinationals. Other funds, referred to as
Managed or Mixed Funds, invest in a mix of shares, property and fixed interest securities.
Remember: Investment funds are subject to investment risk. Their value at any time could fall below the amount you invested and are generally only suitable for longer term investment, such as five years or more. The level of risk attached to a particular investment fund will vary by what the fund invests in. To guide you, funds are typically graded on a scale of 1-7 with 1 being the lowest risk and 7 being the highest risk.
• Tracker bonds: these bonds typically lock up a lump sum for a term of about five years. At the end of the term you are usually guaranteed to get back at least what you invested (or a high percentage of what you invested, such as 90%), together with a bonus related to the growth, if any, in one or more stock markets or in the shares of certain large multinationals. If the particular stock market or shares to which the bonus is linked, do not increase in value over the term, there is no bonus payable at maturity and in this case you would get back the guaranteed capital sum only, which would typically be the amount you invested.
• Long term savings plans: these plans are available from a life insurance company. They accumulate a capital sum over the longer term from regular monthly savings. The recommended minimum term for plans like these is five years and your savings are typically invested in the type of investment funds outlined above.
Why is advice important?
At Gallivan Financial, our financial advisors can help you to understand your saving and investment objectives, and come up with viable plan to make those goals a reality.
Navigating the often complicated world of savings and investments can be tricky but our team of experts have years of experience in the field. Our financial advisors can help you every step of the way. They will explain concepts like risk, return and diversification, and help you understand what’s at stake.
Above all else, your financial advisor will help you to make the right decisions for you and your money.
What kind of return can I expect on my investment?
The longer the term, the more impact even a small extra return will make on your investment.
Investment returns will not necessarily be consistent and you may not get the average return – it could go down as well as up.
Stock markets and other equity-based investments can be volatile and subject to sudden drops, but they do tend to trend upwards over time. If you’re in it for the long-term, you can “ride out” the ups and downs of riskier funds.
How much risk should I take on?
There are many factors to take into consideration when deciding how much risk to take on. It will depend on your own preference, your capacity to withstand risk and your objectives.
Your financial advisor will help you arrive at the right decision.
Investments can be pretty complex but with the right advice you can really put your money to work. Give us a call today to get the ball rolling.