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TQ Invest is a specialist broker providing low cost investments (such as ISAs) to people who are happy to make their own investment decisions and don’t want to pay for the advice of a financial adviser. This means that you must obtain full details of the products and look at your own circumstances, objectives and attitude to risk before proceeding. To help, TQ Invest offers a variety of research tools to help you understand the investments you are making, and has a UK call centre on hand to help with any questions you may have.
Before starting to compare investments it’s worth having a long think about whether investing is the right thing for you. Whilst investments can outperform deposit savings accounts for returns, they come with risks attached – risks that you should understand before proceeding.
Investing should always be considered as a longer term undertaking – anything from 5 years upwards. So the money you invest must be cash that you don’t need to access for a fair while.
If you do need to get at your money you could face hefty penalties. This means that cashing in an investment in the early years could result in you coming out with less money than you originally invested.
The other point to make is that a longer term investment has more chance to grow because it can even out short term fluctuations in investment performance. You would also want to avoid cashing in an investment when the market has fallen, as this could result in you making a loss.
When compared to a deposit savings account, the potential returns on an investment can be far higher.
But the flipside to the potential reward is the risk of losing some of the money you initially invested, if your investments don’t perform so well.
A savings account works in a different way…
When you put money in a deposit savings account the bank or building society invests or “lends” your money to other people who need to borrow. Part of the interest payments from the borrower are passed on to you, as interest on your savings. If the people borrowing your money can’t afford to repay, the bank or building society absorbs the loss and doesn’t pass it on to you.
So the essential difference between a deposit savings account and an investment is this:
Whether this risk is worth the potential reward depends on how you feel. Would you be happy to lose money on your investment for the chance to earn more? Generally speaking, the greater the potential reward, the greater the risk you are taking.
Arrange a low-cost investment with TQ Invest Speak to an independent investment adviser from TQ Active Money (for advice) Download free investment reports and guides Compare savings accounts