5% interest ISA with Pru - any good?

[Ray Singh]

My financial advisor is advising a 5% ISA with the Pru, he has also mentioned a 5% savings account.
He is employed by Pru - so not independant and is charging me £400 for the privalidge.

I am looking for a decent interest rate savings account, either ISA or otehrwise.

Any help apprecieated.

Thanks

[CarlosFandango11]

Ray Singh said:

My financial advisor is advising a 5% ISA with the Pru, he has also mentioned a 5% savings account.
He is employed by Pru - so not independant and is charging me £400 for the privalidge.

I am looking for a decent interest rate savings account, either ISA or otehrwise.

Any help apprecieated.

Thanks

You won't get anywhere near 5% from a savings account or cash ISA, maybe somewhere between 1% for an easy acces account and 2.25% fixed for a few years.

The Pru do not currently offer a cash ISA (i.e. a savings account where you don't pay tax). An ISA with them will have investment risk (you might get back less than you put in) and any 5% mentioned won't be guaranteed - this doesn't appear to be what you want.

Your Pru financial advisor can't help you get a savings account or cash ISA as the Pru don't offer these products. If you told him that's what you're after and he has recommended a Pru ISA, I wouldn't have anything more to do with him.

Bear in mind that you only pay tax on interest above £500/£1000 (dependant on your marginal rate of income tax) that you earn over the tax year, so a cash ISA may not have any advantage over a normal savings account.

[Ginge R]

Ray Singh said:

My financial advisor is advising a 5% ISA with the Pru, he has also mentioned a 5% savings account.
He is employed by Pru - so not independant and is charging me £400 for the privalidge.

I am looking for a decent interest rate savings account, either ISA or otehrwise.

Any help apprecieated.

Thanks

Take advice on the merits of waiting until after midnight when Vanguard rescinds its embargo on a certain press release.

[Ray Singh]

I dont understand......

[jonah35]

Its called prufund And offers an expected growth rate as it tries to smooth out the ups and downs of investing. I really like it.

Read up on it online.

[sidicks]

jonah35 said:

Its called prufund And offers an expected growth rate as it tries to smooth out the ups and downs of investing. I really like it.

Read up on it online.

'expected' growth rate is fairly meaningless, and not comparable with a Cash ISA!

[CarlosFandango11]

Ginge R said:

Ray,

Apologies. Vanguard will be announcing details of its platformed d2c proposition later this evening, with the embargo being lifted at 2359. I shan't be breaking it, but suffice to say, if I was investing small sums via Hargreaves Lansdown, I'd be paying it very close attention. It won't be the panacea for all (those who already have large assets for instance) and it's going to be a quite blunt instrument in many ways, but it's certainly going to shake the tree. Good news.

The OP is looking for a "decent interest rate savings account, either ISA or otherwise".

So this new Vanguard product is a savings account, otherwise why suggest it for the OP?

[Ginge R]

If the principle of Pru Cautious had merit, so does my suggestion. I am assuming the adviser wouldn't have suggested it, unless he had grounds for doing so. I find it utterly inconceivable that a tied adviser in such a vertically integrated company like Pru, these days, would be as inept as you suggest. If correct, then a modest amount of investment risk within the Prufund Cautious fund may well have been discussed to sit alongside the savings account mentioned, and my suggestion remains extant. The Pru adviser may have been acting correctly, giving good counsel in other words, and not acting merely as a validator.

[Jockman]

jonah35 said:

Its called prufund And offers an expected growth rate as it tries to smooth out the ups and downs of investing. I really like it.

Read up on it online.

Didn't with profits funds promise this too......?

[Ginge R]

Jockman said:

Didn't with profits funds promise this too......?

Prufund *is* a WP product. In fairness, Pru has bucked the with profits trend, done it really well, and it has built up a good track record. Not for everyone, certainly, but certainly worth a look if you want certain characteristics within an investment.

http://www.pruadviser.co.uk/content/ourfunds/prufu...

[jonah35]

Jockman said:

jonah35 said:

Its called prufund And offers an expected growth rate as it tries to smooth out the ups and downs of investing. I really like it.

Read up on it online.

Didn't with profits funds promise this too......?

Yes indeed although in a slightly different way.

Going back over the past 25?years or so what has the pru with profits fund averaged? 5% pa? 6% pa? Pretty similar really

I think pru were founded in 1838 so theyve stood the test of time (and eorld wars) more than many companies.

An expected groth rate isnt meaningless as thats the interest rate they apply (but reserve the right to change it every 3 months). Of course,mits an investment and so can go down but look at the past performance.

[sidicks]

jonah35 said:

Yes indeed although in a slightly different way.

Going back over the past 25?years or so what has the pru with profits fund averaged? 5% pa? 6% pa? Pretty similar really

I think pru were founded in 1838 so theyve stood the test of time (and eorld wars) more than many companies.

An expected groth rate isnt meaningless as thats the interest rate they apply (but reserve the right to change it every 3 months). Of course,mits an investment and so can go down but look at the past performance.

Be careful! Past performance was achieved during massively different investment conditions!

[jonah35]

sidicks said:

jonah35 said:

Yes indeed although in a slightly different way.

Going back over the past 25?years or so what has the pru with profits fund averaged? 5% pa? 6% pa? Pretty similar really

I think pru were founded in 1838 so theyve stood the test of time (and eorld wars) more than many companies.

An expected groth rate isnt meaningless as thats the interest rate they apply (but reserve the right to change it every 3 months). Of course,mits an investment and so can go down but look at the past performance.

Be careful! Past performance was achieved during massively different investment conditions!

Yes, of course, good point. Future returns could do better or they could do worse.

I suppose you could look at the with profits fund returns over the past 20 years as this would include the credit crunch and tech bust.

Of course, no one has a crystal ball. I do know that getting a return in cash is difficult at present though

Some people only save in cash but youll never retire if all you do is save monies in cash and dont try to generate a good return. Prufund or not, investing has better longer term growth potential than cash.

Edited by jonah35 on Thursday 18th May 19:16