In May 2020, the best yields on a Cash ISA crawl just over 1 percent per annum. The rate of return is completely negligible. And instead of only making £100 a year on £ 10,000 of investment, I will be buying the best FTSE 100 shares to get rich. Rock-bottom interest rates are the reason for the failure of this epic Cash ISA.
The Bank of England is so worried about the United Kingdom economy that it has cut interest rates to 0.1%. Governor Andrew Bailey is also spoken about doing the unimaginable, and moving to negative interest rates.
ISA Cash? no thanks
How does Money ISAs mean? Banks move their expenses on to their customers relatively easily. Therefore lower interest rates set by the central bank mean lower interest rates for customers of Cash ISA.
And then I would buy shares and my options for the best FTSE 100 shares with high dividend yields would beat anything you could hope to get out of a Cash ISA.
Do your research thoroughly to purchase the best FTSE 100 shares paid for by dividend. Using compound interest instead to reinvest any dividends and increase the share in these firms.
So look out for the traps of historically cheap FTSE 100 shareholdings in industries that will fail in the UK recession to come.
Evite this, buy it
At present, for example, I would stop buying stock of high street banks. Lloyds trads on the FTSE 100 at less than 30p a share, by far the cheapest.This, I believe, is your best chance at getting rich and early retirement. A 10 per cent annual dividend yield (which is perfectly feasible over time) will pull in £1,000 a year on an investment of £ 10,000, 10 times better than an ISA cash.
Many companies are under pressure, as the country faces a sharp recession. But luckily, even in our poor economy, there are strong FTSE 100 companies that transact very well. And there are healthy investments to be made even though recession is looming.
But earnings for Lloyds should remain depressed for a long time to come in a super-low interest rate setting. Analysts at the Berenberg broker said: "Banks have seldom appeared so cheap, even though uncertainty has rarely been so strong."
You can also read this- Michael Hill closing 9 stores globally, 3 in NZ, forecasts further closures.
Alternatively, I 'd look for high-yield FTSE 100 dividend-paying businesses that make huge profits if the sun shines in the economy or storm clouds are in front.
I 'm talking about British American Tobacco likes who pay a dividend yield of 6.7 per cent when you buy their shares. This is the world's second-biggest tobacco company.
There is also SSE, which has sold off its unprofitable market business and is more focused on wind farms being developed and operated. I think on FTSE 100, it has one of the best opportunities for the future. It still proceeds to offer a high yield of 8.2%.
And well-placed multinational energy BP pays out 10.4 per cent yield. These are my choices for the best FTSE 100 shares. I assume that an investment in these shares will over time completely beat everything from a Cash ISA.
Thank You.