Investment at the low risk end of the spectrum?

14 January 2019

The New Year is now in full swing and as busy as ever with client work and new enquiries.

2018 ended with significant market falls over the last quarter of the year and there has been much comment on this position. From a global perspective, we have continued to experience market volatility, with the potential slowing of global growth, and rises in interest rates in the US. This is largely reflected in recent fund values and we anticipate this may continue during 2019. We continue to maintain our investment 'house view' on our website to reflect the current position.

During the times when we have experienced investment volatility, it is important to remember that most asset related investments are made for the longer term and that movements in the market are to be expected, both now and into the future. We have been, and we remain, keen advocates of investment diversification across investment areas and assets to add some reduction in investment risk, whilst providing the potential for future returns. For reference, this is detailed on our website in our Investment Risk Scale document here:

It is important to recognise that many answers to financial planning issues are addressed with investment into other asset types, such as deposit funds or National Savings & Investments (NS&I) products. An example might be the establishment of an emergency deposit fund, a fund that allows easy access to say three to six months' income for unforeseen emergencies.

What are the current options and what returns will they offer? We have looked at these further and provide some examples below.

Investment Description



Current return


Premium Bonds from NS&I

National Savings & Investments product

1.40 pa (rate used to calculate prize fund)

Up to £50,000 maximum investment per individual. Tax free winnings after the first calendar month

Guaranteed Income Bonds from NS&I

National Savings & Investments product

1.45% pa gross 1.46% AER *

1-year fixed rate / payable gross, maximum investment £10,000

Guaranteed Growth Bonds from NS&I

National Savings & Investments product

1.50% pa gross / AER

1-year fixed rate / payable gross, maximum investment £10,000

Virgin Money

Deposit Savings Account / Double Take E-Saver

1.50% pa gross / AER

Variable rate (access only twice a year)

Internet only

Marcus by Goldman Sachs

Online Savings Account

1.50% AER **

** Includes a bonus rate of 0.15% gross fixed for the first 12 months

Individual accounts only (not joint)

* AER – Annual Equivalent Rate – illustrates what the annual rate of interest would be if the interest was compounded each time it was paid.

These rates and terms are correct at the time of writing and can change. Please check current terms before investing.

Inflation can erode the real return that you may receive from your investments.

Personal Savings Allowance & other tax allowances

Tax can play a pivotal role in the way these funds are held, and it might be sensible to reduce tax by holding funds in ISAs (maximum investment of £20,000 each in the current tax year), or in a partner/spouse's name who may have a lower tax rate, noting that the first £1,000 of gross interest is available without the deduction of tax (basic rate tax payers) and £500 for higher rate tax payers (£nil for additional rate taxpayers).

No individual asset allocations, advice or recommendations are provided during the course of this article

We hope that this update is helpful, detailing some of the options for cash/near cash type investments. As you would understand, this provides no individual advice or guarantees of future performance but does give an insight into current economic conditions.

Please speak to the team at Chapters Financial for your investment planning needs.

Keith Churchouse FPFS


CFP Chartered FCSI

Chartered Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899