Deposit Account Rates ..

Jay Dee

Hi,

Came across this while I as looking for advice on 12month Bank deposits.

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Best Savings Interest Rates – 12 Month Fixed

The best interest rates available to Irish residents on a 12-month fixed-rate savings account.

Updated July 8th 2023.

Banco Português De Gestao at Raisin 3.6% (Min €20k Max €100k)

BFF (Italy) 3.5% via Raisin Bank Min €5000 Max €100k)

PTSB 1.25% Min €5k

BOI 1.25%(Min €5k)

A €25,000 deposit at 3.6% for 12 months would earn €900 interest before DIRT (Tax)

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Who are these guys ?

Does anyone have any experience with them?

How can they offer twice our bank rates ?

Will you ever see your money again ?

Any advice would be welcome..

Thanks

Jay

JTMan

Raisin.ie operate a deposit marketplace.

Raisin.ie have being operating here for 7 years.

Many European banks offer much better rates than what is available in Ireland.

cillo2000

Some of the banks listed with Raisin have a local withholding tax and some dont, they are definitely a great option. Also look at trade republic, they pay 2% (50k max) and it's paid monthly and there is no term. Bunq pay 1.56%, interest is paid weekly (protected up to 100k). The Irish banks a miles behind

Cape Clear

You will need to declare the interest to revenue and pay 33% DIRT unless you are exempt.

Jay Dee

@Cape Clear

Is there not a minimum amount that is free ?

Thanks for the response.

Jay

Jim_Hodge

https://www.boards.ie/discussion/comment/120946425#Comment_120946425

No, none

Saudades

https://www.boards.ie/discussion/comment/120946425#Comment_120946425

You're probably thinking of the Capital Gains Tax which is also 33%.

homer911

With the current yields on Irish Government bonds, why are more people not buying them instead of using term deposits or State Savings?

The yield on this one has dropped a bit recently but at current price, its approx. 3% pa return over 8 years. As its a zero % coupon there is no income tax and any growth on redemption or maturity is free of CGT...

https://live.euronext.com/en/product/govbonds-detail/IE00BMQ5JL65-XMSM/quotes

Cape Clear

https://www.boards.ie/discussion/comment/121025331#Comment_121025331

Are there any costs involved with buying or cashing these in?

Geuze

https://www.boards.ie/discussion/comment/121025331#Comment_121025331

People don't know much about Govt bonds.

People don't know where to buy them.

Lots of reasons.

Geuze

https://www.boards.ie/discussion/comment/121025367#Comment_121025367

Normal stockbrokers fees.

I use DeGiro, their fee is 3 euro commission per trade.

Jim2007

https://www.boards.ie/discussion/comment/121025331#Comment_121025331

Most people do not appreciate the risk profile of bonds, even government ones and I would not advise people to go buying individual bonds.

Geuze

https://www.boards.ie/discussion/comment/121025331#Comment_121025331

Note that Govt bonds are only risk-free if held to maturity.

The bond prices can move daily.

Jim2007

https://www.boards.ie/discussion/comment/121028270#Comment_121028270

They are not even risk free then!

homer911

They are almost as risk free as state savings, and bond prices will always move towards par as they approach maturity. Prices will definitely shift with movements in ECB rates. This is my rough assessment of various short to medium term bonds, my calcs may be a bit out, but they are consistently out..

Geuze

Fair play to you for doing that spreadsheet.

jace_da_face

This RTE article caught my eye. It mentions eye watering returns of 4%, 9% and 22% on State Savings Bonds.

"From the start of October, the Three-year Savings Bond will offer a return of 4%, the Five-Year Savings Certificate will go to 9%, the six-year to 10% and the 10-Year National Solidarity Bond rate will go from 16% to 22%."

It then goes on to say:

"As the State Savings Schemes are priced over the lifetime of the products, they have to be broken down to their AER, or Annual Equivalent Rate, in order to provide a direct comparison with the banks.

The three-year product translates to an AER of 1.32%, the five-year to 1.74%, the six-year offers 1.75% annually and the ten-year, around 2%."

Obviously I can't break this down to see where the equivalent AER rates get finally calculated, but the returns really don't seem to match the other European banks' offerings, although the savings bond are exempt from DIRT.

daheff

https://www.boards.ie/discussion/comment/121066770#Comment_121066770

these rates are tax free though. so equivalent pre tax rates would be 1.97% (1.32%), 2.60% (1.74%), 2.61% (1.75%), 2.99%(2%)

jace_da_face

https://www.boards.ie/discussion/comment/121075608#Comment_121075608

Sure but still not as good as the rates offered by Raisin.ie in foreign banks.

Jim_Hodge

https://www.boards.ie/discussion/comment/121076118#Comment_121076118

You're just not getting it. Greater risk garners higher possible returns. Irish banks, and State Savings, don't need to incentivise deposits as they are already awash with them.

JoeCat

https://www.boards.ie/discussion/comment/120914974#Comment_120914974

Any idea which ones don't have the withholding tax?

jace_da_face

https://www.boards.ie/discussion/comment/121076395#Comment_121076395

I don't think I follow. What greater risk? This is money on deposit in European banks, not the stock market.

daheff

https://www.boards.ie/discussion/comment/121088454#Comment_121088454

But it is greater risk in some cases. Look at the credit rating of those banks Vs Irish state.

Jim_Hodge

https://www.boards.ie/discussion/comment/121088454#Comment_121088454

You had better have a long look at how that option works and where your funds are being invested,

Q&A

There is always risk but there are protections in place . For banks in Europe there is a €100k deposit guarantee so if you're saving less the €100k you should be covered. Now if you're saving more than €100k you've much more skin in the game and would benefit from diversifying across institutions.

jace_da_face

https://www.boards.ie/discussion/comment/121088553#Comment_121088553

When you put money on deposit, you do not need to concern yourself with where it is invested. This is money on deposit gaining interest, not an investment per-se, it is savings. You might have concerns with what kind of investments the particular bank makes and how solvent the institution is, but that risk is not yours. And while run on banks and banking insolvency are not unheard of, if you don't believe that, then you do not have faith in the banking system and would be better off keeping it under your mattress.

doubledouble

Hi guys. State savings seem good to me that 9 percent esp. . I've 150 k. And would like advice or talk to anyone who went down the state savings road please

Jim_Hodge

https://www.boards.ie/discussion/comment/122862412#Comment_122862412

Just to be clear. It's 9% over 5 years.

That said, I have considerable amounts in various state savings products, and have done so for 40 years, and when the tax free element is taken into account they are good value. Being locked in for 3, 5, or 10 years can work neither way for/against you depending on interest rate fluctuations.

Geuze

https://www.boards.ie/discussion/comment/122862412#Comment_122862412

What is there to say about State Savings?

They are simple, State-backed savings account.

Jim2007

Just to be clear. It's 9% over 5 years.

Around 1.7% - 1.8% annualised for comparison purposes.

billyhead

https://www.boards.ie/discussion/comment/122875148#Comment_122875148

Its better then nothing and secure.

Jim2007

https://www.boards.ie/discussion/comment/122875542#Comment_122875542

Not really no. It's state guarantee is no better or worse than that covering the banks. And a quick browse of the bank websites would suggest there are better offerings out there with a shorter term commitment.

Jim_Hodge

Keep in mind when comparing rates that State Savings are not liable to 33% DIRT Tax.