Putting all savings in NTMA?

ATC110

Registered User
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343
Considering PTSB and now KBC have reduced their already low savings rates, NTMA seems to be the best option paying 0.15% and drip feeding an Ulster Bank Home Saver account.

Is it advisable to consolidate savings and put them all in a state owned deposit facility?

It appears negative interest will be standard soon and I think it will provide an opportunity for the government to apply a deposit levy to fund the huge public spending debt it is incurring.
 

NoRegretsCoyote

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2,523
My (completely amateur) view is that state savings will never see negative rates, or any kind of levy either.

They were a very good source of funding during the financial crisis when financial market borrowing evaporated.

Also politically very unpopular. Greece defaulted on international finance in 2012 but never touched small Greek retail bonds.
 

fayf

Registered User
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178
If one is not interested in any form of risk, State savings are one of the alternate - risk free options. But better to pay off any debt first, as that will have a much higher rate attached.

Take the 10 year state savings, 16 % guaranteed with zero DIRT, there is no other product that gives a nett 16 % into your hand after 10 years- totally risk free, & capital guaranteed. In addition, you can withdraw and exit early and all your initial investment back, but, may not keep up with inflation, but significantly better, than what any bank will give you, and bank are all subject to DIRT of 33%, so even if you managed to get say 0.75 % from a bank, DIRT knocks off one third of this, giving you just a nett 0.50 %.

10 years is a long time, and one could probably, do a lot better with equities, or, get up to 40 % tax relief on a pension contribution + equity growth.

Personally, if i had debt, i’d pay that off first, and then, increase pension contributions, possibly invest something in EII (40% tax relief available), which comes with risks, then, have a risk mixture for whatever is left, emergency cash funds, some in state savings, some in medium risk investments.
 

Slim

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2,358
...possibly invest something in EII (40% tax relief available), which comes with risks, then, have a risk mixture for whatever is left, emergency cash funds, some in state savings, some in medium risk investments.
Might I ask what EII is? Thanks.
 

fayf

Registered User
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178
Employment Investment Incentive.

Basically you invest in Irish Companies, who increase their headcount. Some of these are new, some are growing.

You can get 40% PAYE tax relief on your investment - it is a 4 year term. But 40% of your investment, is refunded to you by way of a PAYE refund,, when you do your tax return. This changed last year, as initially, you only got 3/4 of the tax relief in the year of investment, and a further 1/4 in the 4th year. From Oct 2019, you get the full 40% tax relief in the year you invest.
Typically, a Company might envisage say 10 to 20% return after 4 years, so if this is achieved, you would be a getting 50% +effectively.
There are risks of course, many of these companies are startups, or in an early growth phase. Even if the return is zero, and you only get your capital returned, you still get 40% tax relief. That looks quite attractive when banks are paying zero. However, there are risks attached. Several brokers and Finance houses offer EII schemes this, so shop around.

 

Zoe Fitz

Registered User
Messages
2
Considering PTSB and now KBC have reduced their already low savings rates, NTMA seems to be the best option paying 0.15% and drip feeding an Ulster Bank Home Saver account.

Is it advisable to consolidate savings and put them all in a state owned deposit facility?

It appears negative interest will be standard soon and I think it will provide an opportunity for the government to apply a deposit levy to fund the huge public spending debt it is incurring.

Having read on this website about Ulster Bank's Home Saver I tried to open one online When I couldn't I consulted UB Branch and was given a copy of UB's Personal Banking T&Cs. On p. 23 point 8 of which is stated:

"You may only open Home Saver if you are resident in Republic of Ireland and saving to purchase your principal primary residence".

Too bad!
 

ATC110

Registered User
Messages
343
"You may only open Home Saver if you are resident in Republic of Ireland and saving to purchase your principal primary residence".

That is way open to interpretation. It's just marketing - they'll be glad of your money.
 

ATC110

Registered User
Messages
343
Those days are long gone.

Banks are drowning in deposits now and are charged to park them overnight.

They only encourage saving for a mortgage because they'll get a borrower at the end of the process.
Fair point re deposits.

The "saving to purchase your principal primary residence" clause though?
 

Saavy99

Registered User
Messages
705
Raisin.ie partner with european banks to offer irish customer decent rates in the current climate.

Eg 1 yr with portugese bank at circa 0.9%. Savage.

It's alot better than sweet nothing from the Irish banks. I'm with Raisin, very good set up too.
 
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