Experts recently said that consumers should take a pass on long-term savings accounts in the wake of the global economic crisis.
The general mood amongst investors in the aftermath of the recession has been characterised by widespread aversion to risk, personal and business bank account experts have said. This has led people to take the safe route with their cash by taking out products such as ISAs with long term return guarantees.
Despite this, Bloomsbury Financial Planning partner, Jason Butler, states that it’s unwise to take out any kinds of savings product for a term in excess of six months unless you absolutely must know the return. This comes on the heels of recently published research findings by F&C Investments showing that many Brits are finding their savings efforts hampered by their attitude towards disk, despite knowing that putting cash away in the future is sound financial advice.
30 per cent of those surveyed remarked that their primary attraction for putting money away in savings products was for them was complete capital security. By extension the remaining 70 per cent had decided to not even consider any equity investment activity immediately.
Meanwhile, 4 out of every 10 respondents were most concerned with pursuing a strong interest rate. 45 per cent stated that the most risk they’re comfortable with is to hold cash on deposit.
Undoubtedly aware of these recently revealed figures, Mr Butler said that you can’t take the risk on the money if you can’t lock it up for ten years. He continued, adding that individuals should avoid locking up their cash for periods of time that were too lengthy, since this may lead to a condition where the market rate goes up but their locked-in rate remains under-performing for years.