The Motley Fool

Have £10k to invest? I’d ditch a Cash ISA and buy these 2 FTSE 100 shares right now

Image source: Getty Images

Investing in FTSE 100 shares could be a wiser move than saving money in a Cash ISA. The best interest rate on an easy-access Cash ISA right now is just 0.65%. As the current level of inflation is 0.7%, the real value of your savings is being nibbled away. Furthermore, interest rates aren’t forecast to increase significantly over the coming years.

As such, investing in higher-yielding FTSE 100 shares, in a Stocks and Shares ISA, could be a much better strategy. Sure, there’s always a risk of the capital value of a stock falling. But this risk can be reduced by investing across a diverse range of businesses.

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...

With this in mind, here are two FTSE 100 stocks that pay generous dividends. These could help supercharge the return on your savings, and lead to impressive capital and income growth in the long run.

One of the most reliable FTSE 100 shares

National Grid (LSE: NG) is the biggest utilities company listed on the London Stock Exchange. At a current share price of 935p, its market capitalisation is £33bn.

The group is a monopoly owner and operator of big chunks of the UK’s vital gas and electricity infrastructure. It also owns regulated assets in the north east of the USA. It’s a capital-intensive business, meaning it has to make substantial long-term investments. The reward for this is a regulatory framework that allows reasonable and reliable returns for shareholders.

National Grid paid a dividend of 48.57p per share for its last financial year. This was a rise of 2.8% on the previous year, in line with its policy of annual increases matching RPI inflation. At the current share price, the running yield is 5.2%.

I’d be happy to buy shares in this FTSE 100 utilities giant due to the generous yield. But also because of the nature of its business and record of reliable dividend increases.

Mining dividends

Precious metals miner Polymetal International (LSE: POLY) is among the world’s top 10 gold producers and top five silver producers. Its assets are in Russia and Kazakhstan. At a current share price of 1,690p, its market capitalisation is £8bn.

The company’s trailing 12-month dividends total $1.02 per share (65.3p at the conversion dates). Therefore, the running yield is 3.9%.

However, City analysts are expecting a big uplift ahead, in part due to the company’s recently revised dividend policy. A payout of $1.34 per share (101.5p at current exchange rates) is forecast for 2021. This produces a yield of 6% for buyers at the current share price.

I’d be happy to be one of those buyers. The company has a strong committment to providing shareholders with “superior sustainable dividends.” And I reckon the prospect of a 6% yield for starters is highly attractive.

FTSE 100 shares knock spots of cash!

In summary, and in my opinion, National Grid and Polymetal International are two strong picks for a portfolio of diversified FTSE 100 shares. There are currently a good number of blue-chip businesses with solid long-term growth potential and appealing dividend yields that knock spots off cash. Therefore, a portfolio of such stocks could produce impressive total returns in the coming years.

There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it!

Don’t miss our special stock presentation.

It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.

They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market.

That’s why they’re referring to it as the FTSE’s ‘double agent’.

Because they believe it’s working both with the market… And against it.

To find out why we think you should add it to your portfolio today…

Click here to get access to our presentation, and learn how to get the name of this 'double agent'!

G A Chester has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Our 6 'Best Buys Now' Shares

The renowned 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.

Simply enter your email address below to discover how you can take advantage of this.

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.