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Forget the top Cash ISA rate. I’d pocket 5%+ here

first_imgSimply click below to discover how you can take advantage of this. Our 6 ‘Best Buys Now’ Shares Image source: Getty Images. Forget the top Cash ISA rate. I’d pocket 5%+ here “This Stock Could Be Like Buying Amazon in 1997” Enter Your Email Address I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee.center_img See all posts by Edward Sheldon, CFA Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Edward Sheldon owns shares in Royal Dutch Shell, Legal & General Group, GlaxoSmithKline, Lloyds Bank, Aviva, and Imperial Brands. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK has recommended Imperial Brands and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. As we begin the new decade, the outlook for savers remains quite dire. Currently, the top easy-access cash ISA rate is just 1.35%, which is lower than the rate of inflation.That said, if you’re willing to take on a little risk, there are ways to generate a much higher return on your money. Here, I’ll explain how it’s possible to generate a yield of 5% and higher, tax-free, on your money, by investing in dividend-paying companies within a Stocks and Shares ISA.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Boost your wealth with dividendsDividends are cash payments that companies pay to their shareholders on a regular basis, out of profits. Not all pay dividends (high-growth companies often prefer to reinvest their profits). But here in the UK, plenty do.For example, well-known FTSE 100 companies such as Royal Dutch Shell, Lloyds Banking Group, Legal & General Group, and GlaxoSmithKline, all pay their shareholders dividends on a regular basis.Generous payoutsYou’d be surprised just how generous many UK companies are when it comes to rewarding their shareholders with dividends. Compared to Cash ISA and savings accounts interest rates, the dividend yields offered by many FTSE 100 companies are amazing.For example, Shell paid its shareholders dividends of $1.88 per share last year which, at the current share price and exchange rate, equates to a yield of 6.4% – nearly five times the top Cash ISA rate. Similarly, Legal & General paid out 16.4p per share in dividends, which equates to a yield of 5.3% at the current share price (analysts expect a higher payout of 17.5p per share for the year that just passed). Meanwhile, Lloyds currently has a yield of 5% and GlaxoSmithKline yields 4.5%.There are plenty of FTSE 100 stocks that have higher dividend yields too – for example, Aviva currently yields 7.1%, while tobacco giant Imperial Brands yields a colossal 11%. Easy moneyBut if we keep things simple for now and just consider Shell, Lloyds, Legal & General and Glaxo (which I view as four pretty solid dividend stocks), you’re looking at an average dividend yield of around 5.3% – nearly four times the top Cash ISA rate.Split £10,000 across these four stocks, in a Stocks and Shares ISA, and you’re looking at dividends of more than £500 per year, tax-free. When you consider that £10K in the top Cash ISA is only going to pay you £135 for the year, £500+ in income from dividend stocks is a pretty good deal, in my view.Risks to considerOf course, there are risks to be aware of. For starters, when you invest in shares, your capital is at risk. Share prices move up and down, meaning you might not get back what you invested.Each company has its own unique risks to consider. Given the volatility of stocks, it’s generally recommended you invest in shares for at least five years. Secondly, dividends are not guaranteed. If a company’s profits fall, the dividend can be reduced, or even cut.However, when you consider the kind of income stream you could potentially build from a diversified portfolio of dividend stocks, the risks of investing in dividend stocks are very much worth it, in my view. Edward Sheldon, CFA | Friday, 3rd January, 2020 I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.last_img read more

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