Maximising cash savings for clients: Are there alternative options to bank accounts?

In an environment where interest rates are being cut, the interest offered by traditional savings accounts is decreasing and inflation is trending back towards target. Now is a good time to make sure that cash and the best short-term investments for your client’s needs are working as hard as they can.

The Cash & Cautious Bond Portfolio (C&CB) is particularly suited to clients seeking to grow their funds with a measured level of risk. The C&CB Portfolio is designed to meet short-term financial goals, such as funding private school fees, covering nursing home expenses, retirement plans, or setting aside reserves for tax obligations.

Managing money across traditional savings accounts can, within protection limits, be safe but time-consuming. The C&CB Portfolio offers a competitive alternative while remaining focussed on high credit quality and liquidity.

Portfolios can be constructed to balance near-term cashflow needs, target-date or horizon preferences and extend maturities beyond the immediate-term, all within a disciplined framework that is mindful of interest rate, credit and liquidity risks.

In the UK, money saved in traditional savings accounts by individuals is generally considered safe and is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000 per person, per financial institution*. For anyone with more cash savings than this cap it’s wise to spread exposures across multiple different institutions so that this protection can apply if needed. However, managing multiple instant access, notice and fixed-term deposits across various banks consumes considerable time and energy and may not offer the highest return.  

Evelyn Partners’ C&CB Portfolio is designed to address the frictions and challenges of spreading funds across numerous accounts and the inflexibility of fixed-rate arrangements. Investing in a range of permissible maturities at the short end can also bring exposure to yields beyond the immediate horizon and, for increased peace of mind, known liquidity needs can be accurately targeted and mapped with cashflows. Meanwhile, the inclusion of UK government and AAA-rated Supranational, Sub-sovereign and Agency (SSA) allows for breadth and diversification of credit risk exposures. 

Investments in the C&CB Portfolio can be allocated between cash, money market funds, UK Treasury Bills (T-Bills) and fixed-coupon UK government (gilt) and SSA issues with less than five years to maturity. Deconstructing each client’s unique liquidity, cashflow and liability/maturity horizon preferences allows for optimised allocation across these constituent instruments. All investments are sterling denominated. 

Here are some key aspects to note about the product: 

Diversification: By purchasing UK government bonds, we are in effect lending client’s reserves to the UK government rather than another institution. This reduces counterparty risk, because lending to the UK government is generally more reliable as they are less likely to default than entities offering corporate bonds, for instance. 

Traded daily, the price and value of short-dated government bonds and short-dated SSA issues will move with changing interest rate expectations. This can have a large impact on the value of long-dated bonds but is considerably more muted for short-term bonds, which is why C&CB portfolios may only include UK government or SSA bonds maturing within five years. Where a bond is held until maturity, the return is fixed but where funds are required before this point there is a risk that you receive back less than originally invested 

Accessibility: Fixed-term deposits can typically offer enhanced returns when compared to instant access accounts, however it is likely that your clients will be charged a penalty fee or lose out on earning higher interest if they want to access their money earlier. Whilst C&CB Portfolios are crafted to reflect expected client preference and need, UK government bonds and SSA issues are traded daily and can be sold as and when required.

One of the strategies which can be employed within C&CB portfolios is the gilt ladder. This involves creating a portfolio of UK government bonds (gilts) with varying maturities to give a predictable and regular maturity/liquidity profile and exposure to interest rates beyond the immediate term.

To find out more register for our C&CB Portfolio webinar on 2 July 2025 or download our guide.

*Excluding National Savings & Investments