Savvy savers should opt for a best buy cash savings account over a FTSE 100 tracker, according to new research which challenges conventional wisdom.
The study by financial journalist and BBC Money Box presenter, Paul Lewis, found that this type of savings account beat the tracker in 57 per cent of 192 five-year periods starting each month from 1 January 1995 to the present.
Cash was an even better bet over longer periods, trumping the tracker fund 96 per cent of the time in the 84 different 14-year periods since 1995.
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And the tracker fund lost money up to a third of the time over investment periods ranging from one to 11 years, while cash always grew.
Lewis said: "I have long suspected that the merits of cash were underplayed by traditional research which compares poor cash rates with often exaggerated gains on investments in shares."
Over the full 21 years the tracker ended up producing a compound annual return of six per cent, beating the five per cent produced by best buy savings accounts. But Lewis points out that this one per cent "risk premium" for investing in shares is far lower than the three to eight per cent traditionally quoted.
He used previously unused data from financial information publisher MoneyFacts to compare returns from the best one-year deposit account each year since 1995 to those from a FTSE 100 tracker.
"This analysis of the new data shows that people who prefer the safety of cash can make returns that beat those of tracker funds in a majority of time periods," Lewis said.
He continued: "It also confirms that the risk of making losses on a shares investment is very real. Over any investment period from one to five years from 1995 to 2015 there was about a one in four chance or greater that the value of the investment would fall."
"Even over nine or 10 years the chance of losing money was around one in 10. Few advisers know whose odds still less inform their clients of them."
But Laith Khalaf, a senior analyst at Hargreaves Lansdown, questioned Lewis' findings. "The idea of 'active cash', where savers continually move their money between best buy accounts, is a very appealing idea, but it's difficult to achieve in practice," he told the BBC.