Low Risk Investments

With the Bank of England''s low base rate it''s not very easy to find a good place to save on the High Street at the moment. Most savings accounts are offering less than 1% and cash ISAs aren''t too much better.

There is some suggestion that things may shortly improve. The Bank of England recently announced an end to stimulus measures for the economy and the current high inflation may result in a rise in the interest rates. Still, with the economy still a little unsteady any rise is at least several months away.

So where should you save the money that you do have? The important thing is to make as full a use of your ISA as you can before the start of the new financial year. Even if ISAs are not offering excellent rates at the moment, money stored in them is tax-free, so when interest rates return, the more money you have in your ISA, the more interest you will earn tax-free.

If your cash ISA allowance is full, another thing you could do is look at stocks and shares ISAs.

Many people are wary of stocks and shares ISAs, primarily because of the recent volatility of the stock market. However, stocks and shares ISAs can offer excellent returns and if you find a low risk account can be a really good place to invest.

One of the lowest risk places to invest is in a corporate bond ISA. Corporate bonds are a financial instrument that companies sell in return for a promise to pay a certain amount of money every year over a pre-agreed period.

Corporate bonds can be risky, which is why you should stipulate that you want a low-risk ISA. A low-risk account invests in secure companies and particularly in government bonds. Government bonds are extremely safe because the government never defaults on its debts, so it will always meet its interest payments. A good low-risk account will offer a return of about 5.2% at the moment and your investment should be safe.

There is no reason to be wary of stocks and shares ISAs. Make sure that you get a good supplier who you trust and invest in an ISA with a low-level of risk and you''ll make far greater returns than you could in a cash ISA or a savings account.

By: Renato Loehrer

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Renato Loehrer is very knowledgeable on savings and accounts and loves to write about corporate bonds.