A senior strategist at the Royal Bank of Scotland is warning of a severe crash in the global stock markets over the next three months.
RBS credit strategist Bob Janjuah speculates in a recent report that the S&P 500 index could fall by more than 300 points, or 22%, to around 1050 by September. “Mid-July through to October is likely to be the most bearish period we will experience in the bear market,” writes Janjuah.
"A very nasty period is soon to be upon us - be prepared."
Gloomier than others
Now it should be stressed that the RBS’ prediction is gloomier than most other analysts in the market. Nonetheless, it’s understandable if some investors are feeling somewhat jittery these days.
If you’re looking to move some of your money to safer shores, or simply want to hold off investing more until things smooth over in the marketplace, you may want to consider depositing your money in a good, old-fashioned savings account for the time being.
Yes it’s boring, but all funds are guaranteed up to £35,000, and banks are currently offering inflation-busting rates on instant access, regular and notice savings accounts.
Best notice accounts
If you’re happy to lock your money away, there are no fewer than eight different banks offering rates of 7% or more.
FirstSave is currently top of the pile, paying an impressive 7.1% on its one, two and three year accounts.
The catch is you have to invest a minimum of £1,000. For those who want to invest smaller amounts, ICICI Bank offers a slightly lower 7% rate but allows you to save anything from £1.
Best regular savings
Halifax has recently upgraded its Regular Saver account to an impressive 10%. Better still, it allows you save as much as £500 a month – twice that of most other regular savings accounts.
As with all such accounts, it’s important you stick to the rules – make deposits every month, don’t make withdrawals – or you will see your interest rate plummet by more than half.
Best instant access
The problem with notice and savings accounts is that your money is locked away for a fair amount of time – not ideal if you’re planning on investing your money back into stocks at some point in the future.
With this in mind, instant access accounts can prove an attractive option – even if the rates on offer are slightly lower. The best paying instant access accounts are probably the Birmingham Midshires e-Saver issue 2 (6.51%) and the Kaupthing Edge High Interest Savings account (6.50%).
Both allow penalty-free withdrawals at any time, although the Kaupthing Edge account does require that you maintain a balance of at least £100.
