Today, we are pleased to announce the new inbestMe Savings Portfolio.
The inbestMe Savings Portfolio is a perfect complement to what is already the widest range of automated investment portfolios in Spain (and a good part of the world), with more than 100 portfolio options.
New inbestMe product: Savings Portfolio
I am especially happy to be able to announce this launch, because it is fully in line with our vision/mission that stimulated us in 2015 to conceive inbestMe and launch it in 2017.
This vision/mission was not only to help our clients to invest better, but we wanted to provide our clients with tools that would allow them to plan their financial life in the short, medium and long term in a holistic way, constituting a virtuous quadrant of efficiency that would allow them to optimize their money without having to give up their preferences, i.e. with a high degree of personalization.
This quadrant was incomplete until now, as we were unable to help our clients optimize short-term savings/investment.
With this launch, we achieve at least an important part of that vision/mission, completing the virtuous quadrant of financial planning that allows our clients to save and invest efficiently in all their vital objectives linked to their finances, including short term ones.
Savings Portfolio helps you achieve short-term goals
The Savings Portfolio is the ideal way to optimize our short-term objectives (say 1 to 3 years), either to build up an emergency fund, or to help achieve other short-term objectives, for example, to save and accumulate money for a trip in two years time without losing a tenth of a percent of profitability.
This is because its flexibility allows it, since it can be started from €1.000. But also, as it has no limits on the amount, it can help to achieve more ambitious objectives to be reached in a few years, such as the down payment for a car or a house, without compromising the capital. It is equally useful to optimize the profitability of €1,000, €100,000 or several million.
We always recommend thinking about objectives, but if we do not want to do it, the Savings Portfolio also serves to obtain an interest on the money you want to keep very close to liquidity, but that (in principle) you do not need for your day to day. But do not confuse it with a current account, the money is available, but it may take about 5 working days to reach your current account.
Savings Portfolio has no volatility
Unlike the other inbestMe investment accounts, the most distinguishing feature of the Savings Portfolio is that its volatility is zero.
If, on the one hand, from inbestMe we will continue to insist that you do not stop pursuing your medium and long term investment plans, on the other hand, we also understand that given the current market circumstances you have some doubts about whether or not it is the best time to invest. You know what the saying is, the best time to invest was yesterday, the second best is today, but while you think about it, the Savings Portfolio will earn you a safe interest, as long as interest rates are positive.
The Savings Portfolio is the perfect account to deposit short term money and accumulate interest, that is to say, for that money that for the moment you cannot invest in the medium or long term or until you are psychologically prepared to do so. Its feature of zero volatility keeps it isolated from the risks of the markets and allows you to keep your savings while accumulating a variable yield that will vary with the official rates (in the short term according to all the forecasts to rise).
We do recommend that you don’t confuse your short-term goals with medium- and long-term objectives. Don’t stop investing in the longer term: to beat inflation, increase your wealth or simply retire with some comfort, you may need to consider longer-term profiles. Look for the combination that fits your personal situation – that’s what the virtuous circle of goal-based financial planning is all about.
Interest accrual and tax deferral
The inbestMe Savings Portfolio is a securities account made up of a selection of the best money market funds or ETFs specially selected and supervised by our investment committee.
The interest accumulates, generating more profit on your investment, which is called the magic of compound interest. This is a distinguishing feature compared to traditional bank deposits, where you receive your interest periodically and taxes are withheld at that time (usually 19%).
In this account, the earnings will accumulate, and you will not pay taxes until you really need your money.
In the end, if you never need it, you will defer taxes unlimitedly. What’s more, you can even transfer your accumulated savings (including unpaid taxes) efficiently to other investment accounts on inbestMe if this suits you, taking advantage of the transferability of investment funds in Spain (not applicable to ETF portfolios and to non-residents or legal entities).
No ties, no limits, no permanence
Unlike bank deposits, the Savings Portfolio does not have a term, or in other words, the term is set by you according to your needs. Just as you can add more savings without limits whenever you want or schedule recurring contributions, you can also withdraw your money without any limitation, i.e. there is no mandatory permanence or penalty for withdrawing your money.
The money is yours, and you can dispose of it by requesting a partial or total withdrawal, and in about five working days you will have it in your regular checking account.
Digital registration in a few minutes
Want more advantages? You can open your new Savings Portfolio in just a few minutes from your couch, on your computer or cell phone, and in just a few minutes digitally.
Savings Portfolio Coverage and Guarantees
Like any inbestMe securities account, the Savings Portfolio is covered up to €100,000 by the FOGAIN (Investment Guarantee Fund) in the event of the bank’s insolvency.
The inbestMe Savings Portfolio is not covered by the deposit guarantee fund, unlike a bank deposit.
A bank deposit has a risk level 1 out of 6 of the financial product risk indicator. As we can see in the table below, most deposits are subject to some liquidity risk as they have a term to be met or penalties in case of early withdrawals.
The monetary funds included in the Savings Portfolio have a risk level 1 out of 7 according to the scale established by the CNMV regarding the risk of investment funds. However, they have no liquidity risk as they do not have a term, except in very exceptional and unlikely cases that we described when we talked about money market funds or ETFs.
Regardless of these considerations, it is clear that the most widespread sentiment is that a bank deposit is the ultimate expression of security. But a monetary fund linked to interbank rates is no slouch, and therefore neither is the inbestMe Savings Portfolio:
- The guarantees offered by a portfolio of securities such as the inbestMe Savings Portfolio, which combines some money market funds, can be similar or even, depending on how you look at it, more solid or at least more diversified than those of a bank deposit.
- Through the use of some money market funds from different first level fund managers (Blackrock, Pictet, …).
- As our money is not in a single balance sheet of a bank or financial institution and is diversified not only in first level fund managers, but the funds in turn diversify their positions in hundreds of assets.
In any case, any investment is subject to some type of risk that must be considered. Even if we keep our money in liquidity, we are subject to exchange rate or inflation risk.
You may be interested in learning more about how we calculate variable Savings Portfolio yields.
In this link, you can consult the updated yield of the Savings Portfolios.