Can I compare returns from property investment with bank interest rates?Oct 13, 2020
With interest rates on bank accounts at an all-time low, many are keen to highlight the high interest rates that they can offer. This often leads to comparisons being made between the investment opportunities and the more traditional banking products, e.g. savings accounts.
The FCA states that if the financial promotion compares relevant investments, you must ensure that the comparison is meaningful and presented in a fair and balanced way.
For example, investing in property:
🔴 is an illiquid investment;
🔴 any investment losses will not be covered by the Financial Services Compensation Scheme (FSCS);
🔴 the capital is at risk (you could lose everything); and
🔴 returns are not guaranteed.
Whereas with savings accounts:
🔵 you can often have instant access to your funds;
🔵 you know the level of return you will receive; and
🔵 the FSCS provides financial protection for the first £85,000 that is in your bank account. In the event that the bank goes bust, you will get that money back.
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