Santander Private Banking

With cash deposit options in high demand, clients will require more choice, says Santander Private Banking in Jersey.

With many of the world's leading equity markets continuing to exhibit persistent volatility, demand for cash products remains strong, as investors look for lower risk options to include in their portfolios. The flight to more secure asset classes is a common reaction when investors are unsure about the short and medium term direction of major equity markets. As investors commit to cash for longer term periods, the demand for a variety of cash options begins to become apparent.

The current abnormally low interest rate environment, UK Base Rate has now been at its record low of 0.5% since 05 March 2009, means many standard variable rate deposit accounts are only able to yield low interest rate returns. This in turn has deterred investors from leaving funds in these easy access style accounts for lengthy periods. As a result, particularly amongst higher balance investors, more choice in the range of account type available is now being requested and more effective solutions to the problem of holding cash over longer periods are sought.

Santander Private Banking in Jersey has responded to this challenge by developing a comprehensive portfolio of sterling fixed rate contracts over varying terms from six months to five years. With interest rates being fixed, an added advantage for investors is that they now know what return they can expect over a given period of time. For example, fixed deposit contracts are offering interest rates of 4.15% gross/AER on deposits over £100,000 for five years. Three and two year fixed rate contracts offer similarly high returns of 3.65% gross/AER and 3.55% gross/AER respectively on similar opening balance sums. Other options include 9 (2.60% gross/2.61% AER), 12 (3.40% gross/AER) and 18 (3.65% gross/3.62% AER) month contracts, enabling clients to build a portfolio of deposit contracts ranging from 9 months to 5 years, depending on personal preference. Santander Private Banking believes that being able to offer a known return in the current market environment is a very attractive option for many of its clients.

Head of Investment Products at Santander Private Banking, Paul Clifford comments, "Initially, around two or three years ago, we saw clients opting for relatively straightforward short term interest rate accounts which offered a balance of access and return. However, as clients have become more wary, due to rising uncertainty in the equity markets, we have seen an increase in demand for a much wider range of fixed term contract options due to the security they are able to add to a portfolio."

Globally, Santander Private Banking has over €90 billion of client funds under management and more than 2000 professional staff operating out of over 120 offices worldwide.