NEW Money Market Funds On Trading 212!
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- čas přidán 25. 06. 2024
- In today’s video we’re going to be touching on a new investment option on the Trading 212 app called Money Market Funds. Money Market Funds are a way for investors to invest their cash in a low risk way. Money Market Funds are rather attractive to investors currently due to central bank rates being high, meaning yields on these funds can be upwards of 4.5%, and Trading 212 are about to launch a new money market fund feature to allow you to capitalise from the upside too.
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NEW Low Risk High Return Investment On Trading 212!
00:00 Intro
01:14 What Is The Money Market
02:50 Money Market Funds
06:47 Unlock MMF On Trading 212
08:33 Risk From Investing
📷 Instagram: @mitchinvesting
#Trading212 #Trading212ISA #Trading212Invest
Disclaimer: This video does not represent financial advice, and I am not a financial advisor. When investing, your capital is at risk. Investments can rise and fall and you may get back less than you invested. Past performance is no guarantee of future results. Free shares can be fractional. *Terms and fees apply - www.trading212.com/terms/invest.
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Disclaimer: All ideas presented within this video are that of my own based on my own opinions. Please do not consider any of these videos as financial advice as I am NOT a financial advisor. All financial decisions and choices made are solely your responsibility. The views shared in this video are just for entertainment purposes only. When investing, your capital is at risk and can go up in value as well as down in value. You should consult a suitably qualified professional when seeking out investment advice in order to fully understand the risks associated with investing.
UPDATE: Trading 212 have already uplifted the rates, USD is 5.1%, GBP is 5% and EUR is 4.2%. All other details on other currencies can be found on their website! Happy New Year guys, wishing you all a prosperous 2024! First one back on the topic of Money Market Funds, I hope you find the video useful. If you are looking to get your investment portfolio started this year, Trading 212 have kindly given all my subscribers 1 FREE share valued up to £100 by signing up toa free account using the following link: trading212.com/promocodes/MITCH
Mitch it's now 5.20% on T212
Great informative video. I currently have multiple isa accounts which I DCA into weekly, however I do tend to have standing cash in these accounts. If I hold for example 5k in my vanguard acct would it make sense to allocate this to the fund you discussed to utilise the interest benefit, then convert back to cash to purchase my etf’s weekly? The one thing I would like to clarify is, does the MMF discussed have a minimum maturity date or can you buy and sell at your convenience without compromising the interest gained?
Thanks.
Just what the doctor ordered.Very clear, simple to understand explanation of this product. I wonder if you might do the same for Bonds or gilts. I've watched a few videos on this subject but I'm still not clear about how they work. They certainly don't seem to be simple.I don't see where the attraction is in Bonds.They seem so volatile.
Noted! I’ll add it to my list of video ideas, definitely a topic worth covering! Thanks for the idea 👌🏼
I pay my rent 6 monthly . What date will I get paid on the vanguard mmf ?
What are your thoughts on multisector bond mutual funds like CBLDX for example? While it isn't the same as a money market fund the volatility on this one seems low & the dividend is significantly higher.
is it safe leaving your money in QMMF longer term until the interest rates drop below a sonventional bank savings account? what are the risks apart from reduced interest and liquidity?
Really interesting. Thank you. In terms of tax, would gains made in this way be treated as interest on savings (so a personal savings allowance of £1k, or £500 depending on tax band) or is this taxed as capital gains (with the allowance soon to be cut to £3k)?
It doesn’t count as personal savings as money market funds are classified as an investment. Any money made through a stocks and shares ISA which is what I use is tax free. Anything in a general investment account would be subject to normal capital gains tax.
Brilliant. Thank you
Hey Mitch, great video again!
What do you think about the new higher interest rate on ininvested cash option but with volatility?
Hey! Thanks! I must’ve missed that update… have you got some more details? I’ll look into it
@@MitchShoesmith It's called "Unlock Higher Interest Rates" and T212 are offering 4.5% but it is held in a QMMF
If I have a T212 ISA and opt-in for the extra interest, does that remain within the ISA wrapper or does it create a separate Investment Account within T212 outside of that ISA wrapper? If everything stays within the ISA thats great, then when buying say more ETF shares within my ISA it just decrements from the available higher rate earning uninvested cash.
Yeah that’s correct, it remains within your ISA
I assume the interest earnt on these, contribute to your annual interest allowance and anything earnt above this would be taxable?
Correct unless your money is held in an ISA
Interesting stuff, if I've understood correctly just a couple of thoughts. If you don't select the new MMF interest mechanism, you wont receive any interest on your cash held going forward? Also, if looks like you're not taking up this option, any reason why? Many Thanks G
Hey Gary, on your first point yes that is correct, on the second point, I made the video before the feature went live, I have activated the feature in my account today so my uninvested cash is now invested in the new MMF ☺️
why people in italy choise scalable capital or trade r or de giro or xtb ?? For me is better this ! Not ?
On T212 does the interest paid out daily (with this new 4/5% interest) into uninvested cash create a compound effect then? eg. Day 1: £10 counts toward daily interest. pays out say 1p for ~4%APR. Day 2: £10.01 counts toward daily interest? Or would it always be my £10 cash deposit that counts.
My understanding is that your first assumption is correct. It’s on the total uninvested cash balance, which includes the increase in interest payments being paid out too, meaning yes it would compound how you’ve explained.
Yes it counts, thing is the percentage they have given is considering the compounding so daily pay out is technically less than the percent given divided by 365.
8:04 🚩🚩🚩why would they only offer it until end of feb? It’s not like money markets will stop existing.
They will continue to offer money market funds, it’s just if you don’t enable the feature you’ll stop receiving interest altogether. You’ll still be able to enable it after Feb if you choose to.
Hello! Love the vids! I’m confused, at the beginning, all those “bonds”. I can’t get my head around what a bond is. Why would I invest in a vanguard bond, when I can do an index fund etf vanguard like sp500? Thanks ☺️
In simple terms a bond is buying corporate or government debt. It allows companies and governments to raise money and in return they provide you (the investor) a fixed rate of return. They’re typically low risk if you invest in high quality credit quality bonds so are seen to be low risk, low return investments - ideal for the more cautious investor. However like you say, ETFs like the S&P500 have provided historically far greater returns than the bond market, so it just comes down to risk appetite and your investment strategy. Hope that helps!
@@MitchShoesmith yes that’s amazing, thanks so much!
10:00 as long as it’s beating inflation I’m okay with a decline, but I’ll be paying attention to February 1
Is this a good idea for a small emergency fund?
I’d personally keep an emergency fund in a high interest rate savings account. Money market funds are a low risk option for your investments, which should be a separate pool of money to emergency funds/savings IMO.
Doesn't that contribute towards your yearly capital interest tax though?
My understanding is if you hold them in a General Investment Account then yes, they would be taxed as interest, however if you hold them in a stocks and shares ISA, it’s tax free. Hope that helps!
My big question is, if yields drop, can I lose money in the money market, or is it just that the yield comes down? Is there a risk of 10k sat in the money market dropping to 9k if yields drop? or is it just the interest paid that will drop?
Hi Tom, if yields fall you’ll go from receiving interest of 5% to say 3% for example, the value of your money stays the same you’ll just receive lower interest. Hope that makes sense!
@@MitchShoesmith thanks Mitch, that clarified things :) I get confused, as if I pick bonds, for example, the price of the bond can change which can change the value of originally invested capital but in the money markets, it just seems like a low risk 5% easy access saver. Thank you :)
Hi Mitch, so im currently averaging out of my Rolls Royce shares, luckily bought 16k shares a couple years ago, selling 100 each week. would it be a good idea to look into these to keep my uninvested cash in? Thanks
Hey! First off congrats on those gains, that’s a great result! Regarding your second question yes you could always activate the feature and collect the 4.5% interest on your uninvested cash until you’re ready to invest into another stock/etf etc…
alot savings accounts offer higher return then this, i have one with YBS paying 7% but you can only put in 500 per month in
I should probably distinguish between savings accounts and money market funds, money market funds shouldn’t really be classified as a “savings” account, and instead should be seen as part of your investment portfolio allocation. Some use it as a stop gap between selling and buying shares/ETFs etc… and should only really be used as a short term mechanism to obtain a rate of return on uninvested funds. I’m sure you can get higher rates of interest in savings accounts with banks, where the purpose of those accounts should be treated differently to the money market funds available. Hope that clears things up!
Great informative video. I currently have multiple isa accounts which I DCA into weekly, however I do tend to have standing cash in these accounts. If I hold for example 5k in my vanguard acct would it make sense to allocate this to the fund you discussed to utilise the interest benefit, then convert back to cash to purchase my etf’s weekly? The one thing I would like to clarify is, does the MMF discussed have a minimum maturity date or can you buy and sell at your convenience without compromising the interest gained?
Thanks.
Great informative video. I currently have multiple isa accounts which I DCA into weekly, however I do tend to have standing cash in these accounts. If I hold for example 5k in my vanguard acct would it make sense to allocate this to the fund you discussed to utilise the interest benefit, then convert back to cash to purchase my etf’s weekly? The one thing I would like to clarify is, does the MMF discussed have a minimum maturity date or can you buy and sell at your convenience without compromising the interest gained?
Thanks.
Great informative video. I currently have multiple isa accounts which I DCA into weekly, however I do tend to have standing cash in these accounts. If I hold for example 5k in my vanguard acct would it make sense to allocate this to the fund you discussed to utilise the interest benefit, then convert back to cash to purchase my etf’s weekly? The one thing I would like to clarify is, does the MMF discussed have a minimum maturity date or can you buy and sell at your convenience without compromising the interest gained?
Thanks.
Great informative video. I currently have multiple isa accounts which I DCA into weekly, however I do tend to have standing cash in these accounts. If I hold for example 5k in my vanguard acct would it make sense to allocate this to the fund you discussed to utilise the interest benefit, then convert back to cash to purchase my etf’s weekly? The one thing I would like to clarify is, does the MMF discussed have a minimum maturity date or can you buy and sell at your convenience without compromising the interest gained?
Thanks.
Great informative video. I currently have multiple isa accounts which I DCA into weekly, however I do tend to have standing cash in these accounts. If I hold for example 5k in my vanguard acct would it make sense to allocate this to the fund you discussed to utilise the interest benefit, then convert back to cash to purchase my etf’s weekly? The one thing I would like to clarify is, does the MMF discussed have a minimum maturity date or can you buy and sell at your convenience without compromising the interest gained?
Thanks.
Great informative video. I currently have multiple isa accounts which I DCA into weekly, however I do tend to have standing cash in these accounts. If I hold for example 5k in my vanguard acct would it make sense to allocate this to the fund you discussed to utilise the interest benefit, then convert back to cash to purchase my etf’s weekly? The one thing I would like to clarify is, does the MMF discussed have a minimum maturity date or can you buy and sell at your convenience without compromising the interest gained?
Thanks.