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What are the Advantages and Disadvantages of investing in products without FSCS protection?

The Financial Services Compensation Scheme (FSCS) is a vital part of the UK financial system and is effectively the compensation fund of last resort for customers of authorised financial services firms. It protects your deposits/investments up to a maximum of £75,000 per person per firm. You can obtain more detailed information about the FSCS by clicking HERE

The advantages of investing with a firm, where your investment is protected is self evident. If for any reason the firm defaults and cannot pay you back you can claim any losses you suffer from the FSCS. There are disadvantages though, for example if you are investing a large some of money the FSCS will only protect the first £75,000 of the investment and the remainder of the investment could still be lost if the firm you invest with defaults. Also you will find that trying to obtain a decent rate of interest on your investment can prove to be very challenging these days through schemes that are protected.

The advantages of investing in Non Protected Investment schemes really come down to the rate of return that you receive. Through our research we have found that there are countless investments available which can offer you up to 100% per annum return on your capital, however when we have looked at the proposition in detail we have generally found them too risky to recommend. We personally would avoid any of these investments which are offering you a return greater than 10% per annum.

We only publish on this website the most secure of these types of investments and as such we have determined that you can still achieve a much greater return on your investment (than through the more traditional channels), with a high level of security. This means that you can still have the confidence that your money is safe, while obtaining a good return for it. Some people regard these types of products as a blessing, especially within the context of the Banks and other Firms offering you ultra low interest rates. In any case you have to also wonder where the “smart” money goes. We have determined that a lot of it goes into these types of Bonds and we are all told on a regular basis to “follow the smart money”