Bank Bonds V Solidarity Bond

tweetydos

Recently had a meeting with a financial advisor at Ulster Bank to invest some savings - I have a query with respect to the navigator Investment bonds - there is a 1.65% fixed charge pa - do these bonds perform well (I know the market crashed and pensions halved, but there must be an upside) or will I just be paying a management fee for 6 yrs?

Has anybody worked out what sort of deal is the new Irish government solidarity bond scheme which promises a 50% return after 10yrs. The SSIA at the time was a no brainer is this not to be missed?

I know there is uncertainty everywhere at the moment, is it better to just keep money in the bank.

pocketdooz

It's 1% per year gross (Pay DIRT on that) then you get a 'bonus' if you leave it in for 5 years, 7 years and at 10 years. You need to leave it in for the 10 years to make it worthwhile.

If you leave it in for the whole 10 years you make 3.9% ish net per year. I would be happy with a 3.9% net gain per year for the next 2/3 years as that beats most if not all deposit/savings rates in Ireland now ... but ...

I am expecting inflation from 2012/2013 ish at which time rates will start to go up again and you could be back to 5% / 6% deposit so I think about 3/4 years into your 10 years you will be making less than you could elsewhere.

If this is true and you withdraw after 4 years all you've made is 1% a year (before DIRT) which is crap.

All in all, a bog standard attempt by the government to get access to cheap financing.

tweetydos

thanks pocketdooz for reply, that simplifies things - I will probably grand or two in the solidarity bond