The graph on our landing page compares the historical returns received by putting money in a savings accounts with a high street bank, or in Basic funds investments. These illustrate the power of compound interest, and the potential benefits of investing for the long run.

It is important to be aware that there is a difference in the level of risk associated with these options, as with RateSetter and Funds your capital is at risk. Investment returns are based on historical performance over the past 5 years, these are not good predictors of future performance.

In our investigation of the market we found that Bank’s savings accounts return a miserable 0.16%. Historical performance Basic Funds (8.07%) shown greater returns. See below for further details on these calculations

High Street Bank Savings Rates - 0.16% per year

Bank Savings Rates are based on a simple average of the flexible option with UK high street banks, which match the Plum options in terms of flexibility (no penalties for taking your funds out), no requirements on how you should use the current account. The Banks and their respective interest rates as of August 8th 2018 are included below:

Flexible Saver, 0.05%

Easy Saver, 0.20%
Instant Saver, 0.10%
Instant Saver, 0.10%
Everday Saver, 0.20%
Easy Saver, 0.20%
Instant Saver, 0.20%
Everyday Saver, 0.25%
Instant Access Saver, 0.10%

Funds Return - 8.07% per year

Basic Funds invest partly in stocks and partly in bonds. Due to inclusion of more stable bonds, their historical returns are lower than the returns of the 100% stock themed funds. We took the 5 year annual total returns (up to August 2018) of the three basic funds, corrected them for management fees, and averaged them out. The average return of these totalled 8.07% per year after the management fees, we then deducted the £1 a month fee to get to the figures you see in the slider. If you enjoy playing around with funds returns, you can either check Vanguards website here or join Plum and read more about these funds.

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