ULSTER BANK’S MODEST RATE IS A MARKET BEATER

Ulster Bank is advertising a ‘great new rate of interest’.

It’s actually 0.6% if you salt your money away over 12 months.

That’s not going to set any pulses racing, but in fact it is the best rate around over a relatively short term without strings attached.

The best you’ll do on demand is 0.3% (KBC). KBC also offers 0.75% over 12 months, but only if you open a current account and pay your salary into it.

That might be worth doing to get its cheap mortgage deals and save yourself a small fortune, but it’s hardly worth it for such a measly deposit interest rate. You could earn up to 7% a year by investing in soaps, detergents and ice cream, albeit at much greater risk, Gillen Markets points out. Unilever, the Anglo-Dutch multinational consumer goods company, which sells all of those aforementioned goods, currently pays a 3.4% dividend yield. ‘In our view, it can grow its earnings and dividends by at least 3-4% annually, which suggests that it can probably deliver a total return to shareholders of circa 6-7% per annum over the medium to long term,’ Gillen believes. ‘For a defensive global business, that’s not bad in the current low interest rate environment in Europe.’ Of course, the catch is that shares are highly valued at present and may fall.