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what interest would you expect for an investment of £100.000

I invested £100.000 over three and a half year period with Scottish Widows. I was only give just over £1300 interest in January. Do you think that this interest is right. Regards. Ian


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No, I don't think it is right, but it probably is correct. Interest rates have been abysmal since QE started. It is cheaper to borrow from the Government than from the people. It is impossible to get anywhere near inflation. What were you promised when you invested? Mike

How was the money invested ?

Even at todays rates that interest is abysmal. I would get out of that one as fast as possible. Three and a half years ago you should have been able to get 3% on fixed-term accounts and not much less on easy access. OK, you would have had to move your money around and get a little less each year as rates have fallen. The rate you have been given is typical of that which occurs when money is left for a long time in a variable-rate account after a bonus has dropped off.

There seems to be some discussion about the lack of decent interest rates on offer. Perhaps it is a sign of lack of effort in getting a decent rate. Currently you can get around the 7% mark by setting up a Stocks and Share ISA and purchasing Subordinated Bonds, e.g. Co-operative Bank 5.5555% Perp. Sub Bonds (call 14/12/2015 @ 100p) Ticker is CPBA , Price is 83.25p, paying 6.67%per annum and if held to maturity then payout in Dec 2015 is 12.92%. The bond is superior to shares but the downside is that you are not protected by the FSA scheme if the organisation goes bust. However there are some banks, like the above, which are well run and not exposed to excessive derivatives.

There have been various comments here but nothing further from the original poster. We have been given no clue about what type of investment the money was in. I suspect that it was in some sort of fund which would have had a Statement of Investment Principles. Some of these funds are severely restricted in what they can invest in and that coupled with the low rates around has resulted in very low declarations. If this is a pension scheme or ISA which has been invested in a Cash Fund then the suggestion would be to switch to a Corporate Bond Fund. There is a slight risk that one of the investments in the fund might fail but the higher rate for the others would more than compensate for the failure. Wigglylines suggestion would be fine if his suggestion was possible on the platform but if a fund is necessary, then the class that he is referring to is Corporate Bonds. Mike