Where do you have your money saved for getting higher interest?

Kaldo

Apart of EBS saving accounts with better AER, where would you put your money right now?

Xidu

I wanna know also as I am w tsb and there’s no interest.

Jim_Hodge

Nowhere is matching inflation but State Savings offer the best rates tax free for savings.

Kaldo

https://www.boards.ie/discussion/comment/120053998#Comment_120053998

Is it reliable to invest on the state?

Snugbugrug28

https://www.boards.ie/discussion/comment/120054175#Comment_120054175

Very

Jim_Hodge

https://www.boards.ie/discussion/comment/120054175#Comment_120054175

Absolutely.

Ireland State Savings - State Savings Products | State Savings

Jim2007

https://www.boards.ie/discussion/comment/120054175#Comment_120054175

You not investing in anything, you are lending money to the state. As a lender what you are most concerned about is the ability to recover the money plus interest and in Europe Switzerland, Germany and Ireland are considered the safest bets. All through the last recession we continued to advise Swiss private clients to buy Irish government bonds for one simple reason: Ireland is a massive net exporter and has been for decades and if you are continually selling more that you are buying you'll eventually work yourself out of any financial difficulty you find yourself in. And we were correct.

I have no hesitation about participating in Irish government savings schemes.

billyhead

As mentioned State Savings. The longer you invest the better your returns although inflation will eat into it.

Kaldo

https://www.boards.ie/discussion/comment/120055614#Comment_120055614

Exactly. Inflation eventually will eat it. However better than nothing.

tom1ie

So what’s the best state saving scheme out there?

Say I had 10k cash that I can afford to have tied up for a good while- 10years or so- what sorta money would that look like in 10 years time?

Eoinbmw

https://www.boards.ie/discussion/comment/120056231#Comment_120056231

10%

tom1ie

https://www.boards.ie/discussion/comment/120056254#Comment_120056254

? There’s a state saving scheme offering 10% a year? Can ya link it

Xidu

Wow 10% yearly return or?

can someone pls share a link?

I am very interested

Eoinbmw

10% over 10 years! sorry!

Xidu

Ok I saw the link and went through

looks like 10% is for 10 years.

that’s way too long.

minimum is only 1%.

means if you put in 10k you will get 100 cash in 3 years! That’s way too low.

I’d rather leave it there.

Eoinbmw

https://www.statesavings.ie/our-products/10-year-national-solidarity-bond

Donald Trump

Someone posted a link on another thread to an online service called Raisin Bank that gives you access to banks across the EU. I know nothing about them other than I looked at their website.

Anyone used them before? It seems that all their banks are covered under the EU mandated minimum 100k guarantees (Although that would depend on the country having the funds to cover it after what they have set aside was exhausted)

The rates available were a few percent. I presume that you would just have to pay DIRT yourself in the annual returns and fill out some forms not to have some money withheld from the country the account was in

o1s1n

https://www.boards.ie/discussion/comment/120056254#Comment_120056254

Jesus that's nothing over ten years, I wouldn't bother.

namloc1980

You simply won't find any savings product that will produce a decent return in this environment.

I'd be wary of using Raisin to be honest. They're a middleman so if they went bust or stopped trading for any reason themselves, you'd have to deal directly with a Slovakian or Croatian bank yourself. Not worth the risk for the fairly meagre returns IMHO. Plus the added hassle of doing your own DIRT returns etc.

For a potentially better return you'll have to take some risk. As it is leaving inflation eat away at it is a risk in and of itself.

Xidu

https://www.boards.ie/discussion/comment/120056321#Comment_120056321

Be careful of this. Don’t invest in things you are not familiar with.

Xidu

https://www.boards.ie/discussion/comment/120056370#Comment_120056370

Same!!

might be better just spend it or buy SPY ETF when it’s dropped under 300.

Donald Trump

https://www.boards.ie/discussion/comment/120056595#Comment_120056595

They are only a middleman. Banking-as-a-service. Your money is on deposit in a foreign bank.

Donald Trump

https://www.boards.ie/discussion/comment/120056422#Comment_120056422

Well one other advantage of using them, would be that you are spreading your risk across multiple banks in multiple countries. If you have five hundred k sitting in Bank of Ireland, then the bank guarantee here will not cover anything above 100k so you might lose that. (Obviously the guarantee is only as good as the ability of the State backing it but ignore that for now). You could instead have 100k in a bank in each of Ireland, France, Spain, Italy, Germany etc.

DIRT returns are fairly handy. They are only a single line item on Form 11 (I think that is the number/name).

Xidu

https://www.boards.ie/discussion/comment/120056625#Comment_120056625

If you have 500k would be better invest in a house and rent? Why bother put in bank w so little interest.

Donald Trump

https://www.boards.ie/discussion/comment/120056652#Comment_120056652

Well perhaps you already have a few houses and that is just your cash. Or maybe you received a lump sum (inheritance or even sold an investment property) and don't want to do anything with it at the minute but want it reasonably liquid for a point in time in the future.

Having 500k in cash to some people might be like other people having 50k in cash. It's all relative. A sole trader could easily have to have over 100k kept relatively liquid in cash too.

Xidu

https://www.boards.ie/discussion/comment/120056681#Comment_120056681

Wonder how many people in Ireland have 500k in cash. That’s insane money to me.

Donald Trump

https://www.boards.ie/discussion/comment/120056748#Comment_120056748

It is. But there would be a lot of people who have it. Anyway, the point is still the same as regards having more than 100k.

To respond to another poster regarding State savings, you could put 100k in a 10-year Irish State Savings bond and have 110k in 10 years time, or you could put it in a French guaranteed bank called "Younited" via that raisins yoke and get back 118,482 in 5 years. If DIRT is still 33% then you'd be talking about 112,383 net. (Technically over the guarantee but scale it down if you want). Nothing to shout home about, but you're getting more in half the time commitment.

tom1ie

https://www.boards.ie/discussion/comment/120056606#Comment_120056606

Or pay off any debt you may have such as a mortgage. T

MarkR

Can you do additional voluntary contributions to a pension?

Jim2007

https://www.boards.ie/discussion/comment/120053971#Comment_120053971

https://www.boards.ie/discussion/comment/120056606#Comment_120056606

https://www.boards.ie/discussion/comment/120056652#Comment_120056652

You need to appreciate the risk profiles, neither equities nor property meets the requirements of people needing deposit or on call services.

Jim2007

https://www.boards.ie/discussion/comment/120057288#Comment_120057288

That does not meet the needs of people needing deposit or on call services....

Jim_Hodge

https://www.boards.ie/discussion/comment/120057288#Comment_120057288

https://www.boards.ie/discussion/comment/120056748#Comment_120056748

Stage of life dictates a lot. AVCs are out if you're retiring.

Not hard having €400k-€500k if a married couple have each received retirement lump sums, transferred the majority of a lifetime's saving and investment to more risk averse cash options, and perhaps came into an inheritance.

Jim2007

https://www.boards.ie/discussion/comment/120056625#Comment_120056625

I keep repeating this, but some people don't get it. Higher return is also associated with some kind of higher risk, no matter how it is presented. I've spent over three decades in Swiss banking and I have yet to meet any of these guys who are willing to give you anything beyond the minimum they need to. So when someone is offering you more than the norm, you need to be on your guard, they are not doing it because they are nice guys and want to help you.

I've looked at Raisin in the past but not as a potential client. Of course by depositing cash in multiple institutions with different states providing the back up guarantee should reduce your default risk, but placing a single intermediary between you and those institutions may also adds another layer of risk. If you were putting a large amount on deposit or even an amount that is significant for you, then there are some points you'd want to be clear on:

• How do you validate that your cash is on deposit with the institution?
• How do you validate that the guarantee covers you and not just the intermediary?
• What is the actual tax and other fees situation

Donald Trump

https://www.boards.ie/discussion/comment/120057778#Comment_120057778

My assumption (and one which I would confirm before depositing any money) is that they are a merely just a middleman. So that you are not giving your money to raisin who promise to deposit it in the bank for you and pass on the return, but that they merely link you up with the bank. You would be the bank's customer, not raisin acting as some kind of agent for you. There could obviously still be some residual risk if you have to transfer money through Raisin rather than directly to the destination bank itself, but I don't know whether that is how it is done or whether they just give you the IBAN for the destination account and you wire it directly.

Their website mentions the guarantee in the context that it would be amalgamated with other amounts you had on deposit at that institution. e.g. if you already have 50k on deposit with bank X in Germany and you put in 60k through Raisin into the same bank, you would be over the guarantee limit. So I would infer from that that my assumption above in relation to who "owns" the account is correct. If it were all under Raisin, then the guarantee would be virtually worthless as they'd likely have large amounts deposited in some institutions.

I'm not advocating for them. I only learned about them on another thread a few days ago and read their website and though it was an interesting concept. I mean with all the EU rules, it should be something that we can do easily. We shouldn't be restricted just to Irish banks

I don't know about fees. Those aren't mentioned. Maybe if you register with them you are told. Tax implications are on their website. At least information as regards withholding taxes. But I think the standard thing would be that you send them a residency certificate from Ireland and they don't deduct it. If they still deducted it, if there was a DTT then that would be deducted from your DIRT liability presumably anyway. I would imagine that within the EU, that they won't deduct it anyway.

(Of course, I was a bit ambiguous in my example above but in case I confuse anyone, the guarantee is not per country but per person per covered institution)

MarkR

True, just offering an alternative suggestion.

Xidu

https://www.boards.ie/discussion/comment/120057749#Comment_120057749

Ok it make sense if you talking about retired people who doesn’t need to take risk.

Donald Trump

BTW, in relation to Jim2007's point about the banks "giving you more than they need to" I just checked there and overnight interbank rates are up near 2% at the minute and 12 month interbank rates are about 3.3%. So the rates on offer are still less than wholesale rates (albeit for retail amounts).

Even if the Bank has a low credit rating, well if you keep below the 100k, the more relevant rating would be the sovereign rating rather than the institution rating. (Assuming everything is as stated). So your principal shouldn't be at (high) risk.

Jim2007

https://www.boards.ie/discussion/comment/120057844#Comment_120057844

I don’t know and I’m not motivated to dig into it. But they claim to have AUM of €28b, now in AM terms that is chump change, but why do they have any at all? All I’m saying is be very careful and make sure you fully understand the legal implications of what you are signing up to.

Jim2007

https://www.boards.ie/discussion/comment/120058427#Comment_120058427

The credit rating of a bank is an irrelevant measure for customers, it is just an indicator of the bank’s ability to raise funds in the market. The T1 ratio measure the banks ability to take a serious blow to its capital structure and still remain viable.

Back in 2007 Irish and British banks had very low single digit ratios where as the Swiss bank I worked for had one of 21. We to a hit of over $50b and survived, Irish banks were not capable of taking the hit. These days the situation is very different with the BIS, ECB & FED all requiring and monitoring much higher T1 ratios.

mct1

https://www.boards.ie/discussion/comment/120053971#Comment_120053971

Ptsb actually have one of the best rates at the moment - 0.75% AER on 18 months fixed rate deposit.

John arse

https://www.boards.ie/discussion/comment/120058569#Comment_120058569

Yes and 1% over 3 years,1.25% over 5 years.

Jim_Hodge

https://www.boards.ie/discussion/comment/120058569#Comment_120058569

https://www.boards.ie/discussion/comment/120058781#Comment_120058781

33% of which goes to DIRT.

John arse

https://www.boards.ie/discussion/comment/120058828#Comment_120058828

DIRT exempt?

Donald Trump

https://www.boards.ie/discussion/comment/120058513#Comment_120058513

Capital is expensive to set aside so I'd imagine most places don't set aside much more than is required. I never worked anywhere with a retail banking arm so I don't know about that side of things but was under the impression that more emphasis is being placed on the likes of NSFR and LCR the last few years. On the trading side of things, a spread would be implicitly priced into derivatives to take into account the cost.

Nowhere keeps 100% of liabilities as reserves. The reserves are to help the bank deal with an unexpected situation but would not cover everything in the event of a catastrophic meltdown of that institution. In which case the depositor is not guaranteed to get all their money back. The credit rating is still of some use to the consumer as a proxy (albeit not guaranteed to be 100% accurate) as to the overall financial health of the institution. It's sort of a cyclic argument to define it in terms of ability to raise on the markets.

(And the counterexample where the normal rating<->yield logic was broken anyway would be when US was downgraded a few years back and Treasury yields went down. Obviously that was sovereign debt so different things at play there and the reasons that occurred would not be relevant for commercial banks.)

paul71

There are peer to peer lending platforms giving out loans to Irish SMEs. Interest rates of 7% to 12%, but no Government backed bank deposit guarantees and your money is very definitely at risk.

28064212

https://www.boards.ie/discussion/comment/120059256#Comment_120059256

That's a mistake by bonkers. PTSB Fixed Term deposit accounts are most definitely subject to DIRT: https://www.permanenttsb.ie/saving-and-investing/deposit-accounts/fixed-term-deposit-account/

mct1

Bonkers is mistake prone.

So let's compare State Savings 3 year bond (.33% no DIRT) with Ptsb's 3 year fixed rate account (1% minus DIRT @ 33% for a €10,000 deposit. Total interest = Ptsb €200 vs SS €100. Clear winner there.

I wouldn't be interested in fixing for longer than that at the moment, not to say others shouldn't.

Kaldo

https://www.boards.ie/discussion/comment/120056748#Comment_120056748

Well, it is not insane. You know how much money has been saved during Covid? You would be insanely surprised

Jim_Hodge

https://www.boards.ie/discussion/comment/120059256#Comment_120059256

Only if over 65 or permanently incapacitated .

coylemj

https://www.boards.ie/discussion/comment/120056748#Comment_120056748

For the number of accounts, I recall a statement from the Central Bank a couple of years ago which said that there was 1,776 deposit accounts in Ireland with a balance of €1 million or more. I remember the number because it's a significant date in US history.

How many accounts have more than 500K? Your guess is as good as mine but it could be anything up to 10,000, especially in the aftermath of Covid when people spent far less on new cars and foreign holidays.

As to the total amount on deposit, as of June 2022, Irish deposit accounts amounted to more than 130 billion euros. Go to the link below and click on the first Table A.18 (opens a CSV file), the number is in the righthand column 'Total Deposits'...

https://www.centralbank.ie/statistics/data-and-analysis/credit-and-banking-statistics/private-household-credit-and-deposits

spuddy

Bunq "Easy Savings Account" - 1.05% (before DIRT) - interest paid monthly. Yes you can get better rates via Raisin, but in terms of effort / risk / reward it's a good choice. Better rates than the Irish banks are offering, better app, instant access (also supports SEPA instant), IE IBAN, easy to setup, covered by the 100k bank guarantee etc.

https://www.bunq.com/benefits/massinterest

For those who have a mortgage however, you'll very likely get a better return than any savings a/c at the moment by overpaying it.