Opening state savings account

presidenttttt said:
genuine question; it looks like the savings interest is nothing special. Whats the value proposition here?
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There are a number of aspects of the State Savings product range which make them worthy of consideration as part of a balanced portfolio
  • Firstly, the strength of the guarantee. The repayment of all State Savings money is a direct and unconditional obligation of the Government of Ireland. There is no upper limit on the guarantee; all funds invested with State Savings are fully guaranteed, and while the total you can invest depends on circumstances it is considerably greater than the €100k DGS guarantee.
  • There is a range of products, both demand (prize bonds) and term.
  • The rates, while far from stellar, are exempt from DIRT and so are competitive with other very low to zero capital risk offerings.
  • All investments, including the term products, may be cashed in at any time. (i.e. where an emergency arises and funds are required). Nominally this is without penalty, however the term products have low returns in the initial years and so the return if cashed in early will be less than the stated rate. ( in the case of Prize Bonds you are obliged to hold these for a minimum of three months; thereafter they may be cashed in at any time)
Examples of possible good fit might be:
  • On selling a property and while searching for a replacement, the proceeds can be reinvested, with the capital fully guaranteed, and the funds available on demand
  • A pensioner invests a large part of her funds in equities (via an ARF). She wishes to hold the equivalent of X years income in a capital risk free option, where drawdown can be staggered with some flexibility, and at the same time enjoy a return
  • A young worker with disposable income wishes to save for a car, house deposit etc and also wants the excitement of participating in a weekly draw (but not flushing money in the lottery). He signs up to invest €X per month in Prize Bonds by DD, knowing his capital will accumulate and will be available when required and he has the bonus of participating in the weekly draws.
Other Considerations. While the products are solid, State Savings customer service, processes and systems are pretty low grade, inconsistent and can very be frustrating to deal with. This is mitigated by the fact that you don’t need to deal with them very frequently.
 
Freelance said:
There are a number of aspects of the State Savings product range which make them worthy of consideration as part of a balanced portfolio
  • Firstly, the strength of the guarantee. The repayment of all State Savings money is a direct and unconditional obligation of the Government of Ireland. There is no upper limit on the guarantee; all funds invested with State Savings are fully guaranteed, and while the total you can invest depends on circumstances it is considerably greater than the €100k DGS guarantee.
  • There is a range of products, both demand (prize bonds) and term.
  • The rates, while far from stellar, are exempt from DIRT and so are competitive with other very low to zero capital risk offerings.
  • All investments, including the term products, may be cashed in at any time. (i.e. where an emergency arises and funds are required). Nominally this is without penalty, however the term products have low returns in the initial years and so the return if cashed in early will be less than the stated rate. ( in the case of Prize Bonds you are obliged to hold these for a minimum of three months; thereafter they may be cashed in at any time)
Examples of possible good fit might be:
  • On selling a property and while searching for a replacement, the proceeds can be reinvested, with the capital fully guaranteed, and the funds available on demand
  • A pensioner invests a large part of her funds in equities (via an ARF). She wishes to hold the equivalent of X years income in a capital risk free option, where drawdown can be staggered with some flexibility, and at the same time enjoy a return
  • A young worker with disposable income wishes to save for a car, house deposit etc and also wants the excitement of participating in a weekly draw (but not flushing money in the lottery). He signs up to invest €X per month in Prize Bonds by DD, knowing his capital will accumulate and will be available when required and he has the bonus of participating in the weekly draws.
Other Considerations. While the products are solid, State Savings customer service, processes and systems are pretty low grade, inconsistent and can very be frustrating to deal with. This is mitigated by the fact that you don’t need to deal with them very frequently.
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Thanks so much.
Would you be familiar with another product with similar safety profile?
 
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