Unit Trusts: A Beginner''s Guide

By Author: Lecia Selbo
Total Articles: 49
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If you are currently on the look out for a new way in which to invest your savings, you could be feeling a little intimidated by the sheer range and scope of the possibilities available to you.

One particularly popular savings scheme available right now is the unit trust. This type of savings scheme has several unique benefits, helping to spread its good reputation as a productive and relatively safe way to invest your hard earned dough.

For those who aren''t already aware, unit trusts differ from other kinds of savings schemes in several ways. Firstly, unlike stocks and shares or corporate bonds, a unit trust will invest your money in a range of companies and organisations, thus spreading the risk attached to investing in just one. Unit trusts can invest in equities, properties, fixed interest securities as well as many other potential money making possibilities.

Unfortunately, any interest accrued on a unit trust will be taxed at 20%, according to the current income tax rates. Any capital you make, however, will be yours tax free. This makes the unit trust a good investment for those who have already used ...
... up the entirety of their tax free savings quota in ISA accounts.

The only real stipulation attached to unit trusts is that you must be 18 years of age before you may open one. Beyond this, you can be as flexible as you wish. You can open a unit trust as an individual, a couple, or even a group of investors. You are also not tied down for a fixed period. You can sell whenever you wish at no extra charge, subject only to the value of the trust according to the market at that time.

Withdrawals from unit trust funds are also possible. Bear in mind, however, that some companies will charge you for this service. It is worth enquiring before you choose which kind of unit trust you prefer.

Most banks and building societies will recommend that you view unit trusts as a long term savings scheme, leaving them along for around 5 years for best results.

The internet is your most extensive source of reviews and resources when it comes to finding out more about unit trusts. Look around at a variety of newspaper articles, financial advice pages and customer reviews in order to make a decision that is based on thorough research, leaving you a well informed investor with a good knowledge of this kind of scheme. Lecia Selbo has had a unit trust with Legal