6.05% Return On Sterling Investment

[ArranP]

Best secure sterling investment I can find is 6.05% from Anglo Irish Bank (Isle Of Man - http://www.angloirishbank.co.im/personal-b...nd-account.asp)

Does anyone know if this can be improved/beaten? I'm investing a lump sum and then living off the interest.

Regards

Arran.

[topfield]

Best secure sterling investment I can find is 6.05% from Anglo Irish Bank (Isle Of Man - http://www.angloirishbank.co.im/personal-b...nd-account.asp)

Does anyone know if this can be improved/beaten? I'm investing a lump sum and then living off the interest.

Regards

Arran.

Yes Arran and in addition you are allowed back 20 percent of your deposit at any time. So if interest rates rise you can withdraw the twenty percent and place at the higher rate ! No other institution allows that !

[Joost]

Hi, great board. My first post btw .

Can i ask why you want a fixed rate when you put money away for just a year? Nobody knows for sure, but it doesnt look like interest is going to drop in the UK - or anywhere else in the western countries.

6,06% is the best i did find too with fixed rates. Not fixed you can get better interests.

If you can i would recommend bussiness bunds tbh. Even a non-risk investment can give a much better performance. Downside (not if you can afford it) is that the price of the bund itself can go dow (and interest up). Maybe you should take a look here. Or at another low cost broker.

[ArranP]

Hi, great board. My first post btw .

Can i ask why you want a fixed rate when you put money away for just a year? Nobody knows for sure, but it doesnt look like interest is going to drop in the UK - or anywhere else in the western countries.

6,06% is the best i did find too with fixed rates. Not fixed you can get better interests.

If you can i would recommend bussiness bunds tbh. Even a non-risk investment can give a much better performance. Downside (not if you can afford it) is that the price of the bund itself can go dow (and interest up). Maybe you should take a look here. Or at another low cost broker.

Hi Joost,

By business bunds do you mean bonds ??

I have looked at bonds and am interested, but so far...., I've not seen any "investment grade" bonds that give a return greater than 6.05%, maybe I'm not looking in right place, can you help me ?

Thanks.

[Joost]

Sorry, yes indeed coporate bonds is the better name (english isnt my native language, you probably did notice already ).

If you have a broker account you can avoid overhead of large companies - and you are more flexible, some brokers let you make a test account (dont know if etrade does that). Most of the time corporate bonds work like government bonds (or a bond account). Every year you get payed the interest afterwards and when the bonds matures your investment will pay out (although new forms are invented regularly and they do not work all the same).

I think someone does not invest in bonds for short term and doesnt necessarily need the money soon (5 - 10 years horizon. To justify a broker instead of a fund account the investment should be quite substantial). Corporate bonds can be bought high and low risk, but most of the time they have a better interest rate than government bonds.

A little explanation about corporate bonds can be found here http://www.investinginbonds.com/learnmore....amp;subcatid=18 or at yahoo http://finance.yahoo.com/education/bond

quotes can be found on a lot of sites, here is an example http://www.investinginbonds.com/marketataglance.asp?catid=34

But maybe your choice is not bad at all if you are new to the bonds market. But for a year i wouldnt choose a fixed rate if possible. But if a fixed rate and a year are your pick, 6,06% seems about the highest you can get (bank of scotland has the same rate too).

[ArranP]

Thanks Joost, yes I noticed the word bunds also used in a foreign context :-)

I understand the reason you would not invest for a fixed term of 1 year is because you believe (probably correctly) that the interest rate will rise again within the next 12 months.

What would be your top selections on the bonds at the moment and how long for would you expect to leave your money invested ?

[highchol]

Best secure sterling investment I can find is 6.05% from Anglo Irish Bank (Isle Of Man - http://www.angloirishbank.co.im/personal-b...nd-account.asp)

Does anyone know if this can be improved/beaten? I'm investing a lump sum and then living off the interest.

Regards

Arran.

Its pretty good but of course headline rates may not be be best suited for all cases. ( your tax position / onshore offshore / ease of access, withdrawl penalties, monthly or annual interest etc )

Im also looking at the moment for similar accounts and i believe we have missed the boat for the top rates ( west bromwch were offering 6.2% last month). The money markets ( uk ) have withdrawn these 6.2% offers because they think rates have pretty much peaked.

Banks are pretty safe places for your money, other bonds may offer better returns but they carry increased risks for that "better return".

[Johnmbmg]

Best secure sterling investment I can find is 6.05% from Anglo Irish Bank (Isle Of Man - http://www.angloirishbank.co.im/personal-b...nd-account.asp)

Does anyone know if this can be improved/beaten? I'm investing a lump sum and then living off the interest.

Regards

Arran.

Arran,

Some good points from Joost. The UK interest rate story will probably stay level or even rise slightly through 2007. Lot's of people still think Sterling is overvalued especially against the Euro. The Dollar as low as it is still looks to have further downside (LARGE budget and trade deficits, war costs, highly leveraged housing sector etc).

A lot would depend on age, amount of capital, risk profile (which sounds low), intended stay in Thailand, likely to repatriate somewhere etc etc.

John

[ArranP]

hi Johnmbmg,

My details are:

age: 35

capital: 300,000+ Sterling

risk: low

intended stay: indefiniately

I would not like to live of the capital itself, but live off the return from it, I will become non-uk-tax-resident.

Regards

Arran.

[Joost]

Have you any idea what amount you need to live in Thailand? With 300.000+ you can get around 1.000.000 baht fairly easy (with the named 6%). When you want to take inflation in considering, you should re-invest some of your return and that would leave you somewhere between 650.000 to 800.000 a year appr.

If that is enough to live on, than your plan sounds pretty secure, but i do not think you get the highest return - even when you do not take risks.

The amount you want to invest is quite large i would say. Why dont you talk to a westen bank somewhere in thailand (HSBC or some). I think you shouldnt invest 300.000+ sterling in just bonds tbh. There are still quite a lot of stocks that give you a dividend return around 3% to 4,5%, with a change (over a longer period of around 10 years a big change) that the stockprice itself will rise too. Examples - all big british financial corps, british oil, shell etc. If you do not want to be bothered about currency risks, stay on the british market.

All of those named companies have corporate bonds too, with a bit better return than government bonds (around 7% should be possible - watch the maturity date, it can be a long way from now).

I really would recommend to talk to some accountmanager at an international bank. They sure will have a nice sollution for your questions. I think with the amount you want to invest you should spread your investments. Especcialy if you want to avoid risks. For example, if you think stocks are to risky, cover the risk with derivatives.

But be carefull with you money! In my country (the netherlands) accounts like the bond account is not that secure if the bank goes bankrupt (although it may sound like a non-risk, last year a bank did go bankrupt over here!). The Dutch Bank insures only € 25.000,- per peson when a bank cant pay out the account! A broker like etrade (or almost any broker account) is a lot safer. Most of the time the stocks/bunds/other financial papers are kept in a different firm (limmited or equal) to insure your money isnt gone when the bank itself goes bankrupt.

[Naam]

"But be carefull with you money! In my country (the netherlands) accounts like the bond account is not that secure if the bank goes bankrupt (although it may sound like a non-risk, last year a bank did go bankrupt over here!). The Dutch Bank insures only € 25.000,- per peson when a bank cant pay out the account! A broker like etrade (or almost any broker account) is a lot safer. Most of the time the stocks/bunds/other financial papers are kept in a different firm (limmited or equal) to insure your money isnt gone when the bank itself goes bankrupt."

PLEASE Joost,

i just opened my evening Sherry bottle in order to relax from a horrible day (workers all around me to fix construction mistakes). reading your last posting sends my blood pressure up, my eyes bulge and my intestines cramp.

why do you hate me so much and won't let me have my Sherry in peace?

[Naam]

"A broker like etrade (or almost any broker account) is a lot safer."

-----

yeah right! brokers are safe. look at one of the biggest brokers REFCO which got bankrupt 16 months ago causing huge damage for customers who trusted a bloody broker instead of their banks.

Refco (Pink Sheets: RFXCQ) is a New York-based financial services company, primarily known as a broker of commodities and futures contracts. It was founded in 1969 as "Ray E. Friedman and Co." Prior to its collapse in October, 2005, the firm had over $4 billion in approximately 200,000 customer accounts, and it was the largest broker on the Chicago Mercantile Exchange. The firm's balance sheet at the time of the collapse showed about $75 billion in assets and a roughly equal amount in liabilities.

[PCA]

Brokers are safe. They dont pay you much of an interest if any but they are safe. Nobody of the traders, accountholders for example at Refco has lost one single dime.

Though investing in corporate or government bonds is not a riskfree investment at all. Exceptions are those with a very short maturity (90days) and the advantage to get out anytime.

If you have 300k Sterling and want 6 % anualized then talk to an independent financial consultant. I dont understand why asking for advice in such a board or do you want phone numbers?

"A broker like etrade (or almost any broker account) is a lot safer."

-----

yeah right! brokers are safe. look at one of the biggest brokers REFCO which got bankrupt 16 months ago causing huge damage for customers who trusted a bloody broker instead of their banks.

Refco (Pink Sheets: RFXCQ) is a New York-based financial services company, primarily known as a broker of commodities and futures contracts. It was founded in 1969 as "Ray E. Friedman and Co." Prior to its collapse in October, 2005, the firm had over $4 billion in approximately 200,000 customer accounts, and it was the largest broker on the Chicago Mercantile Exchange. The firm's balance sheet at the time of the collapse showed about $75 billion in assets and a roughly equal amount in liabilities.

[rgs2001uk]

if the op has money burning a hole in his pocket, i suggest he talks to coutts bankers in the uk, to find out just how much he does or does not have.

imho he should be looking for something giving him capital growth and regular income.

i dont know how knowledgable he is in money matters, but for the uninitated, investment trusts (mutual funds) are an excellent starting point.

he should also have a back up plan/plans

[Naam]

Brokers are safe. They dont pay you much of an interest if any but they are safe. Nobody of the traders, accountholders for example at Refco has lost one single dime.

------

= BULL_STIH² ! one more clown who spreads rubbish

[rgs2001uk]

The amount you want to invest is quite large i would say. Why dont you talk to a westen bank somewhere in thailand (HSBC or some).

joost

the trouble with doing as you suggest is these banks are not independant, and only want to push their own products.

the op may find himself stuck with something that may cost him to get out of, eg front end loaded, if he finds he could do better elsewhere

[PCA]

Brokers are safe. They dont pay you much of an interest if any but they are safe. Nobody of the traders, accountholders for example at Refco has lost one single dime.

------

= BULL_STIH² ! one more clown who spreads rubbish

no need for insulting especially when you dont know what you are talking about.

[Penkoprod]

hi Johnmbmg,

My details are:

age: 35

capital: 300,000+ Sterling

risk: low

intended stay: indefiniately

I would not like to live of the capital itself, but live off the return from it, I will become non-uk-tax-resident.

Regards

Arran.

A couple of things here:

If you are going to become a non-UK tax resident, then wouldnt that mean moving all the capital offshore (with its resultant monthly fees etc)?

Also, your age excludes you from a retirement visa, so the only other ways to live in LOS "indefinatly" are strating a business of some sort, or being married to a THai national. Both of these will be a drain on resources.......no?

You may have to take a bit of a long term risk with at least some of your 300,000+ when you think of what can happen over, say, 20-30 years.

Inflation, exchange rates, the ever increasing monetary requirements of being granted a long term visa, wtc

Looking at your figures, you will get just over 1.2 mill THB @ 6% gross. While that seems more than adequate NOW, you have to think of whats going to happen in the long term future.

You dont have any form of UK pension to look forward to, i take it?

Penkoprod

[ArranP]

A couple of things here:

If you are going to become a non-UK tax resident, then wouldnt that mean moving all the capital offshore (with its resultant monthly fees etc)?

Also, your age excludes you from a retirement visa, so the only other ways to live in LOS "indefinatly" are strating a business of some sort, or being married to a THai national. Both of these will be a drain on resources.......no?

You may have to take a bit of a long term risk with at least some of your 300,000+ when you think of what can happen over, say, 20-30 years.

Inflation, exchange rates, the ever increasing monetary requirements of being granted a long term visa, wtc

Looking at your figures, you will get just over 1.2 mill THB @ 6% gross. While that seems more than adequate NOW, you have to think of whats going to happen in the long term future.

You dont have any form of UK pension to look forward to, i take it?

Penkoprod

Hi Penkoprod,

Thanks for your feedback.

I can use a Non-Immigrant 'O' Visa from Hull in England, its a one year multi-entry visa and fly back once a year to renew it, or alternatively I've heard KL are issueing these to?

I have property I let out in the UK, I'm relying on these for long-term growth. For inflation I'm relying on the rents going up. Therefore I think I'm covered on the long term angle.

For the moment I would like to figure out what is the best option for generating an income from this capital, ie. I would like to get the best return possible using only low risk investment strategy, I do not wish to loose the capital.

Arran.

[JimsKnight]

Yorkshire Building Society - Guarenteed Investment Account.

Minimum £3000.

Interest 14% minimum guarenteed!

Can go above this (dependant on FTSE 100 index)

But if the market goes pear shaped you still get 14% interest clunking into the account

Catches...

Money is locked in for 4 years minimum.

£100 pound fee and loss of interest if you make a withdrawal in first 4 years

Taxed except if you transfer existing Mini ISAs!

Its a good thing!

I know someone whose getting his Thailand retirement money from it!!!

[reasonstobecheerful]

Brokers are safe. They dont pay you much of an interest if any but they are safe. Nobody of the traders, accountholders for example at Refco has lost one single dime.

A friend who ran a very consistent currency trading fund returning about 2% per month has no access to hundreds of thousands of his own money and is being sued by clients for putting their money in refco's (those dogs don't deserve a capital letter) hands. I believe he is hoping to get something like half back eventually.

There is now no fund. He lost his money, his income, and his reputation.

[PCA]

Brokers are safe. They dont pay you much of an interest if any but they are safe. Nobody of the traders, accountholders for example at Refco has lost one single dime.

A friend who ran a very consistent currency trading fund returning about 2% per month has no access to hundreds of thousands of his own money and is being sued by clients for putting their money in refco's (those dogs don't deserve a capital letter) hands. I believe he is hoping to get something like half back eventually.

There is now no fund. He lost his money, his income, and his reputation.

your friend was maybe a contractor of Refco and sharing risk-capital with all other businesses Refco was involved. When he was running a fund for clients then he was capable for the risk.

I am talking about trading accounts for private traders and investors who are using a broker for clearing and settlement. Every registered broker is backed up by at least one bank and an insurance company. The brokerage and clearing part of Refco was bought by MAN Financial who took over all of the private accounts. Every single of them, including mine. I was even trading during all that noise and histery, entered the market with Refco and exited with MAN.

[ArranP]

I see the best way of investing a "sterling" lump sum, safeguarding the capital and living of the interest is:

a) in a "cash account", the best return from a fixed term account being 6.05% per year for a 1 year term. (Anglo Irish Bank - Isle of Man)

bonds, which I know little about but there is a link to www.investingbonds.com to learn about more them, apparently these give a better return than cash accounts ??

c) talk to an international bank manager or broker about my investment needs.

[Casanundra]

Alliance and Leicester currently gives you 6.1% in a bog standard internet savings account and they ain't even an offshore account.

[topfield]

Alliance and Leicester currently gives you 6.1% in a bog standard internet savings account and they ain't even an offshore account.

Actually Alliance and Leicester offshore are paying 5.60 on their base rate tracker ! Cassandra was probably quoting the taxable onshore rate !

Arran, with regard to bonds there is very little over 6 percent. I assume you wish to stick to sterling.

The eurosterling bond with the highest rate I could find is Cable and Wireless which matures in 2o12 and yields 8.4 percent annually and 7.61 to maturity. Pierson plc 2014 is yeilding 6.43 to maturity.

If you want a perpetual you have Standard Chartered yielding 6.2 per cent...it yielded 8 percent in 2002if I remember rightly.

Please do not ignore what I wrote in my first reply namely that Anglo Irish allow you to take out 60k in your case, so you can take out and place with them this amount at a higher rate without penalty should rates rate.....and that is a unique offer .

[sonicdragon]

Yorkshire Building Society - Guarenteed Investment Account.

Minimum £3000.

Interest 14% minimum guarenteed!

Can go above this (dependant on FTSE 100 index)

But if the market goes pear shaped you still get 14% interest clunking into the account

Catches...

Money is locked in for 4 years minimum

14% over what period ? Obviously not per annum. I assume over 4 years ? Of so then it's equivalant to around 4.5% gross per annum, which is not bad considering that 4 year gilts yield around 5.2% and you have a call optioj on the stock market.

Do you have a link to more info on this ?

[topfield]

Yorkshire Building Society - Guarenteed Investment Account.

Minimum £3000.

Interest 14% minimum guarenteed!

Can go above this (dependant on FTSE 100 index)

But if the market goes pear shaped you still get 14% interest clunking into the account

Catches...

Money is locked in for 4 years minimum

14% over what period ? Obviously not per annum. I assume over 4 years ? Of so then it's equivalant to around 4.5% gross per annum, which is not bad considering that 4 year gilts yield around 5.2% and you have a call optioj on the stock market.

Do you have a link to more info on this ?

Here you are sonic......

A piddling 45k max allowed http://www.ybs.co.uk/investment/guaranteed-investment.jsp

[sonicdragon]

I see the best way of investing a "sterling" lump sum, safeguarding the capital and living of the interest is:

a) in a "cash account", the best return from a fixed term account being 6.05% per year for a 1 year term. (Anglo Irish Bank - Isle of Man)

b. bonds, which I know little about but there is a link to www.investingbonds.com to learn about more them, apparently these give a better return than cash accounts ??

c) talk to an international bank manager or broker about my investment needs.

There should be several banks offering rates around 6%. If you "not ordinarily resident" in the UK you should be able to get gross interest paid by onshore banks (ie without the deduction of tax) - however not all banks will do that. Offshore banks usually are not subject to the same regulatory environment as onshore banks and in the even of bankruptcy there is usually significantly less protection. If the funds you want to invest form all, or a large part, of your savings then this is a valid point.

As for bonds, if you are not an experienced sophisticated investor then I advise not getting interested in bonds. Or at the very least you should do your homework so that you know what they are - in particular you need to know about the price/yield relationship, duration and credit risk.

I recommend that you seek the advice of an independent financial adviser (a truly independent adviser, not a bank manager or broker). It doesn't seem very smart to be taking advice from a board like this no matter how well intentioned it might be.

[sonicdragon]

Yorkshire Building Society - Guarenteed Investment Account.

Minimum £3000.

Interest 14% minimum guarenteed!

Can go above this (dependant on FTSE 100 index)

But if the market goes pear shaped you still get 14% interest clunking into the account

Catches...

Money is locked in for 4 years minimum

14% over what period ? Obviously not per annum. I assume over 4 years ? Of so then it's equivalant to around 4.5% gross per annum, which is not bad considering that 4 year gilts yield around 5.2% and you have a call optioj on the stock market.

Do you have a link to more info on this ?

Here you are sonic......

A piddling 45k max allowed http://www.ybs.co.uk/investment/guaranteed-investment.jsp

Thanks. It's not very interesting. It pays you interest only at maturity (4 years), so it's equivalent to around 3.4% per year. And the payoff on the FTSE option is 50%. So, you're giving up around 1.8% in yield vs 4 year UK gilts. That means very roughly you are paying around 7.5% of principal for a 4 year 28%-out-of-the-money call option on the FTSE and you only get 50% of the FTSE gain above 28%.

[Casanundra]

Alliance and Leicester currently gives you 6.1% in a bog standard internet savings account and they ain't even an offshore account.

Actually Alliance and Leicester offshore are paying 5.60 on their base rate tracker ! Cassandra was probably quoting the taxable onshore rate !

Arran, with regard to bonds there is very little over 6 percent. I assume you wish to stick to sterling.

Erm it's only taxable if you keep the UK as your country of abode. If you are resident in LOS and have no foot hold back in the UK then it is not taxable and will be interest paid at gross as you will be able to opt out of paying tax on it with the bank.