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32k at 24 - Not too sure where I should proceed.

  • 28-08-2019 2:09am
    Registered Users Posts: 1,290 ✭✭✭

    Hey folks,

    I have 32,000 euro saved up over the 4 years I've been working which is currently in my Irish bank account loosing money as I have current account fees with AIB! Even without the current fees, with inflation, I'm aware that it's loosing it's value eventually - and this is why I'd like to get into the world of investing.

    I'm currently a UK tax resident (I relocated to London a year back) who is very fluid as to where I'm living due to work and with Brexit, I'd like to keep my money in Ireland or the EU, even if the rate / profit isn't the best. I'd imagine I'll be renting for at least the next 10 years.

    Where would you folks start if you were in my position? Stocks? Savings account? Prize bonds? I'm completely new to this world so any advice would be appreciated!



  • Registered Users Posts: 10,894 ✭✭✭✭phantom_lord

    Do you not get free fees for holding over 2.5k with AIB?

    It's a not a life changing difference but you could start by moving to kbc, free account and higher interest.

    I don't know anything about the UK, but it would be worth looking into an ISA, maybe there's an option to hold Euro dominated accounts (or you could just hold US and Euro equities)

  • Registered Users Posts: 7,495 ✭✭✭BrokenArrows

    32k is a nice little sum of money to have at 24.

    I live in London too, so here is my take on your options.

    I do recommend you move your money to the UK. Right now the exchange rate is very good EUR -> GBP. It might get a little worse, but in my opinion it has a worse flip side of the rate improving.

    1. An ISA. An ISA is a tax free savings account in the UK which comes in a few forms:
    A. Instance Access Cash ISA. Just a bank account which offers a better than standard interest rate and gives you instance access to your funds. Currently you get around 1.5% interest.
    B. Fixed period Cash ISA. Same as above except you dont have instant access to your funds. And you agree to lock away your cash for 1,2,3,4,5 etc years in exchange for a better interest rate. 5 years are around 2% interest, lower for shorter periods.
    C. Stocks and Shares ISA. Savings account that is invested in shares, riskier however has the potential for much larger gains depending on what you invest in. But also larger losses if you invest poorly.

    2. Help to Buy ISA. If you are considering buying a property in the UK in the future then i would seriously look into this. Its an amazing deal.
    Open a Help to Buy ISA. You can deposit up to £1200 initially and £200 per month after that.
    The bank will give you a certain default interest rate, but the government will also give you 25% bonus if/when you decide to use this account to help with a deposit on a mortgage.
    If you decide to get an ISA then you might as well do this at the same time. Get a 2 in 1 account meaning that even if you dont decide to buy in the UK you will still have earned the default interest rate on the account tax free.

    3. Depending on your income you might be able to purchase a property somewhere in London. There are plenty of small apartments on the outskirts of the city for not too expensive and when using the governments help to buy scheme which only requires a 5% deposit then you might be in a good position to buy.
    Mortgage lenders in the UK offer around 4-5 times your salary. So if you are on say 50k a year you could easily get a mortgage for £230,000+ where you can pickup a 2 bed apartment in the south east of london easily enough, or a 1 bed in many more places.

  • Registered Users Posts: 7,495 ✭✭✭BrokenArrows

    As an update to my previous post, if the OP wants to open a Help to Buy ISA account he has 3 months to do it. After that the government is closing the scheme, however people already invested will still be eligible for the bonus until 2030.

  • Registered Users Posts: 4,881 ✭✭✭TimeToShine

    Pretty sure instant access ISA interest rates are way lower, something like 0.2%.

    I'd rule out the Help to Buy based on his post.

    30k is a decent sum, it really depends on your risk appetite. Playing it safe I'd go for the fixed period cash ISA, stick 25k in there for 5 years, circa 2% return per year is decent. Look into Vanguard ISAs too.

  • Registered Users Posts: 7,495 ✭✭✭BrokenArrows

    Pretty sure instant access ISA interest rates are way lower, something like 0.2%.

    Nope. Just have a look on any of the UK comparison sites. Obviously you have to shop around a bit but you can get 1.5%.
    The main high street banks tend to be lower, but still about 0.6% with them.

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