Where is best to bank? To choose a bank it’s best to do your research and find out who offers the best interest rate and the lowest fees. There are however other options besides a bank account that may meet your needs, such as unit trusts, which allow you to use a relatively small amount of money to buy units of a fund that invests in assets such as shares, bonds, and property. You can usually invest in a unit trust with either a lump sum or monthly contributions, access your money easily and your money has the potential to grow over time. There are a huge number of unit trusts to choose from – it is important to be clear on your time horizon and goals before you make any decisions. Your time horizon is the length of time you have before you’ll need your money. This depends on your goal. If you’re saving for retirement, your time horizon is anywhere up to 40 years, depending on how old you are when you start saving. If you’re saving for your children’s education, the time horizon might be anywhere upwards from five years, and if you’re saving for a holiday, it might be one year, or less. The length of time you have available to invest can help you to narrow down your options. The more time you have, the more willing you may be to stomach short-term ups and downs in your investment performance in order to achieve long-term rewards. If you need a short-term place to put your money you could choose a money market fund. Money market funds are suitable for investors who require a short-term investment account, or who are highly risk averse. If you have at least two years, but less than the standard five years or so required for pure equity funds, you may wish to consider a conservative unit trust with the mandate to invest in a mix of assets, including up to 40% in equities. This may improve your return prospects. If you need help making investment decisions you may wish to use the services of an independent financial adviser who can help you to assess what is the best solution for you based on your needs and circumstances.
Posted on: Mon, 26 Aug 2013 05:44:20 +0000
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