Investment Bank

What to do when a savings account just isn’t enough for your spare cash!

Investment banks don’t do current accounts- they make your savings work harder (usually you need £10,000 or so to start). When choosing an investment bank, ask about their past performance for clients, what breadth of investments they operate and specialise in, and what sort of personal service they can offer you.

An investment bank is usually a smaller, specialist company than your traditional high street bank, although they do investment banking too. Your high street bank however is primarily geared to day-to-day banking; cheques going in and out, paying those bills, and offering credit and insurance. An investment bank doesn’t lend anything- it’s geared up for one specific purpose: to take your spare money, and turn it into more money.

As such, investment accounts don’t offer easy access to your cash, or a cashcard- the whole point is to leave the money for a long time and let it work for you. Often you won’t even get a chequebook, and your money is only accessible after asking in writing. An investment bank often adds offshore services (specifically tax avoidance) and private banking to the suite of products, and often the terms are interchangeable.

Be aware though that the job of an investment bank is to advise you on what to do. Expect a level of personal service. Don’t confuse this with investment trusts- which are just one of the many investments open to you. The bank is not a product in itself; it will take your money and invest it, as wisely as possible, into usually a multitude of different investment vehicles. However, you need to know that it is very, very rare that you get any compensation if the market goes down and you lose money. Compensation is almost exclusively confined to cases where clear negligence of illegal activity has occurred. Today, with the markets low and flat, opinion is divided- some say a recovery is on the way and we should invest; others say it’s time for the safe bet of putting your money into bonds. A good investment bank will advise you on precisely such issues.