Monthy Savings
Regularly investing small sums of money into investment funds can be an affordable way to make your money grow.
SUITABLE FOR PEOPLE WITH A MODEST AMOUNT TO SAVE
Investment funds, also known as unit trusts or open-ended investment companies (OEICs), offer savings plans starting from as little as £10 per month, although the minimum amount you can invest will vary from fund to fund.
Monthly savings plans can help you get into the habit of saving a small sum of money each month, and your contribution can be automatically debited from your bank or building society account.
THE POWER OF MONTHLY SAVING
Bank and building society deposit accounts can be a good way to save. However, over longer periods of time, the interest you receive on your savings is unlikely to keep up with inflation, so your money could lose value in terms of what it can buy. Investment funds can help make your savings work harder.
The longer you save, the more you can accumulate as the chart below shows.
The chart below compares the returns you could have received by investing £50 per month in shares (IMA UK All Companies Fund), bonds (IMA £ Corporate Bond fund) and cash (Building Society Account) over the past 10, 15 and 20 years.
With regular savings you avoid having to time your investment. As the price of a fund’s units moves up and down so too does the number of units you will be able to buy each month - this is known as “pound cost averaging”.