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Safe investment for savings (house deposit)

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  • 16-08-2017 10:23am
    #1
    tobdom
    Registered Users Posts: 510 ✭✭✭


    Just looking for some opinions on what might be a worthwhile idea for investing a chunk of cash (maybe up to 50k), earmarked for a house, which would yield a modest return but is completely safe (0% risk of loss).

    It's currently sitting in a savings account of one of the main banks and any interest returned is paltry. Our plans have changed recently and it's likely that we won't be using that money within the next few years, so it seems a good idea to try to make it generate a better return for us.

    Are any of the NTMA (StateSavings) products worthwhile? They at least seem risk free. Even putting it into Prize Bonds (no interest accrual I know) would yield a chance of any winnings returning better than a bank's savings account.

    Any input appreciated!


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    #2
    topper_harley2
    Registered Users Posts: 537 ✭✭✭topper_harley2


    There is no such thing as "modest return" and zero risk. If you are planning to buy a house in next few years, just put it in deposit account. Timing is key for house buying, making E100 quid more interest here vs there is not worth the hassle IMO. Last thing you want is to be waiting for Prize Bonds to be redeemed or State Savings to mature while your dream house is being bid on by other people. If your plans changed recently to not buy a house, they could change in 1 years time again, and you might need the money. Play it safe, and store on deposit.


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    #3
    tobdom
    Registered Users Posts: 510 ✭✭✭tobdom


    Thanks for your input. Our plans are to build (not buy) so we wouldn't be under the kind of pressure relevant to bidding on a house to buy.

    It just seems 'inefficient' for it to sit in a deposit/savings account with a paltry return if it could be making even a slightly better return elsewhere.....


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    #4
    topper_harley2
    Registered Users Posts: 537 ✭✭✭topper_harley2


    50K at 0.65% (best instant access account available) is about E300 quid interest per year, pre-DIRT. Difference between that and some (non-existent) "safe investment with modest return" will be nothing. The shortest State Savings is 3 years, 1%, so AER 0.33%, which is less than you will get in the deposit account. Honestly, for the lack of hassle and ease of access, deposit account is no-brainer for me. There is no way to generate good return at the moment without taking on risk or time. Chances of winning on prize bonds are truly awful, and you may not get a penny over 50K back.


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