Getting a return on company cash

[onedsla]

I'd appreciate some advice for the following situation.

A family company which has growing cash reserves, currently around the £300k mark. For various reasons I don't want to invest in the core business activity in the short to medium term, but want to beat the current 0.5% interest rates.

Any suggestions? I could only accept a very low risk to the capital but would be ok locking it away for 2-3 years.
Many thanks,
onedsla

[dalenorth]

If afraid your going to struggle without taking risk and 4-5 year plan. Saying that it might be worth speaking with your IFA to research what is currently available on the market.

[anonymous-user]

Last time I looked Invested were offering reasonable rates. For that amount I would definitely considering spreading the risk, bearing in mind the limits of the bank protection scheme (assuming the business qualifies).

[anonymous-user]

Last time I looked Invested were offering reasonable rates. For that amount I would definitely considering spreading the risk, bearing in mind the limits of the bank protection scheme (assuming the business qualifies).

[Derek Chevalier]

onedsla said:

I'd appreciate some advice for the following situation.

A family company which has growing cash reserves, currently around the £300k mark. For various reasons I don't want to invest in the core business activity in the short to medium term, but want to beat the current 0.5% interest rates.

Any suggestions? I could only accept a very low risk to the capital but would be ok locking it away for 2-3 years.
Many thanks,
onedsla

You should be able to get ~3% with various business bank accounts

http://moneyfacts.co.uk/compare/business/fixed-rat...

[Countdown]

onedsla said:

I'd appreciate some advice for the following situation.

A family company which has growing cash reserves, currently around the £300k mark. For various reasons I don't want to invest in the core business activity in the short to medium term, but want to beat the current 0.5% interest rates.

Any suggestions? I could only accept a very low risk to the capital but would be ok locking it away for 2-3 years.
Many thanks,
onedsla

We get 2% from the Co-Op for 12 months fixed.

[onedsla]

Thanks for the link and suggestions.
I was under the impression that company deposits are not protected under FSCS, though as we've seen previously, a failing UK bank could be propped up by the government anyway to avoid the knock-on effect. The best rate came from a rather small bank which makes me nervous, though I guess size is little indication of stability; at least they make a profit, unlike some of the big banks.

[sideways sid]

The company can lend you £30k, with which you can buy Premium Bonds.

Any prizes (they pay prizes up to £1m each month) are payable to you tax-free and the capital is protected/guaranteed. This may not beat your 0.5% but potential tax-free returns at zero risk to capital might be a useful component of whatever you decide to do. The loan to the company can be repaid when the company needs the money.

[forest172]

sideways sid said:

The company can lend you £30k, with which you can buy Premium Bonds.

Any prizes (they pay prizes up to £1m each month) are payable to you tax-free and the capital is protected/guaranteed. This may not beat your 0.5% but potential tax-free returns at zero risk to capital might be a useful component of whatever you decide to do. The loan to the company can be repaid when the company needs the money.

Are you sure about that without having to pay tax?

[Eric Mc]

Yes - company loans to directors or employees will create a Benefit in Kind tax charge (for loans over £5,000) and could also result in a Section 4199 penalty Coerporation Tax charge to which will be refunded once the loan has been repaid by the director.

[johnfm]

Is there any mileage in transferring money into other jurisdictions where banks are paying healthier interest rates?

There is a FX risk to contend with.

If it is long term, a balance equity portfolio, investing in decent blue chips that pay a divi.