State Savings - 40/50k for 10yrs

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tosullivan

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Looking at this at moment, just want somewhere risk free with moderate returns for next 10yrs on 40-50k

I have a bit in stocks so covered there

Put in the numbers on their calculator online for 50k for 10ys
Return is 8k on the 50k, is there dirt charged on that?

Thanks
 
Just googling Irish inflation calculator (http://www.hargaden.com) indicates that "€50000 in 2008 was worth about €49965.47 in 2018."
The CPI inflation calculator (www.cso.ie) for €50K during that same 10 year period shows that "A basket of goods and services that cost €50,000 in Apr 2008 would have cost €50,703.56 in Apr 2019."

Based on those figures a return of €8K with no dirt charges appears attractive.
 

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If you invested €45K in 5.5 year savings certs in Nov 2012 you would have a gain of €9,450 by May 2018. I'm sure the return would have been much better with the 10 year product.
 
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Logo said:
Fair enough but I expect that you can plug in the same figures and get almost the same result over a ten year period.
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You get exactly the same result, because both calculators are looking at the same CSO CPI data.

Logo said:
I'm sure the return would have been much better with the 10 year product.
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Yes, the 1st launch in April 2010 paid 50% after 10 years.

But we're gone way off topic.

Interest rates were a lot higher back then.
 
I fail to see why the thread has gone "way off topic". The OP stated a return of 8k on 50k over 10 years. I simply replied with CPI figures for the past years and compared future returns with those available previously.
 
Logo said:
I fail to see why the thread has gone "way off topic".
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Question: "is there DIRT charged on that?"
Answer: Over the last 10 year, the rate of inflation was..

Bang on target. Now he just needs a time machine to travel back to 2008.

Edit: apologies for tone of the above - maybe you saw a relevance that I don't, and I think it could confuse the matter.
Past interest / inflation rates, while interesting to look at, are of no relevance in making a financial decision now. The returns available before aren't available now, and nobody knows how inflation is going to pan out.
The best available risk free return available to an Irish resident, assuming they have no debt, are state savings. They provide a return in excess of 1% per annum above what government debt is yielding in the markets. They also have an in built calculation of early redemption, so if interest rates suddenly shoot up to 5% per annum, you can take your money back.
 
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Logo said:
Just googling Irish inflation calculator (http://www.hargaden.com) indicates that "€50000 in 2008 was worth about €49965.47 in 2018."
The CPI inflation calculator (www.cso.ie) for €50K during that same 10 year period shows that "A basket of goods and services that cost €50,000 in Apr 2008 would have cost €50,703.56 in Apr 2019."

Based on those figures a return of €8K with no dirt charges appears attractive.
Click to expand...

It's unreasonable to assume that consumer prices over the next ten years will be as low as the last ten years.

Ireland faced a unique set of economic circumstances that has kept inflation low. I wouldn't expect them to be repeated.

Ireland is still part of the euro area, and the ECB has an inflation target of close to 2% per annum.

I would expect a return to inflation somewhat as normal sometime soon.
 
NoRegretsCoyote said:
I would expect a return to inflation somewhat as normal sometime soon.
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This has been the standard remark for the last 10 years or so but it isn't anywhere near what has been priced into the market price of euro bonds - but it will eventually come to pass, so … (it's a bit like fusion energy, it's always just 10 year or so away and has been for the last 50 years)
 
I have quite a sum of money in State Savings. Looking at the awful returns on the 3 year and 5 year products I decided not to reinvest a sum of money that was maturing from them. I was actually looking at the list of accounts that I have with maturing dates in to the 2020's and wondered what in God's name am I doing.
Instead I topped up on a high yielding dividend share that returns just over 5% per annum. I know that the price of this particular share fluctuates but I have had a holding in them for over 20 years and I am happy to do so with a little bit of risk.
We had thought of becoming landlords but we are of the age where we don't need the hassle. We had thought of a Spanish holiday home purchased in one of our adult children's names but there was no guarantee that all the family would use it.
So we have decided to spend the dividends on renting someone else's holiday home and generally up our daily spend on enjoying ourselves.
The thoughts of putting more money in State Savings for long periods is kind of depressing. I am however very grateful for everything that I have and appreciate that others haven't been so lucky. Having said that, everything I have has been hard earned, with some risk taking over the years. So tosullivan, have you thought of just spending it?
 
tosullivan said:
just want somewhere risk free with moderate returns for next 10yrs on 40-50k
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There is no such thing.

The Irish Exchequer is way overborrowed. I think that it will last another 10 years, so you should get your money back. But you might not.

If you are a public servant with your income coming from the government, you should definitely diversify away from it as the guarantor of your savings as well.

In any event, you should not tie up your money for 10 years. Your personal circumstances may change or the investment landscape may change.

Brendan
 
Is it the country as a whole you expect to last for another 10 years or the low interest rates:)
 
Yes, return is dismal if you cash out in first 5 years, but it's not as bad as a fixed deposit with a bank @Brendan Burgess

You always get 100% of you're money back, and the amount of interest you receive is pre determined before you start. Banks will refuse to allow access if they can't charge a break fee.
 
Laramie said:
I have quite a sum of money in State Savings. Looking at the awful returns on the 3 year and 5 year products I decided not to reinvest a sum of money that was maturing from them. I was actually looking at the list of accounts that I have with maturing dates in to the 2020's and wondered what in God's name am I doing.
Instead I topped up on a high yielding dividend share that returns just over 5% per annum. I know that the price of this particular share fluctuates but I have had a holding in them for over 20 years and I am happy to do so with a little bit of risk.
We had thought of becoming landlords but we are of the age where we don't need the hassle. We had thought of a Spanish holiday home purchased in one of our adult children's names but there was no guarantee that all the family would use it.
So we have decided to spend the dividends on renting someone else's holiday home and generally up our daily spend on enjoying ourselves.
The thoughts of putting more money in State Savings for long periods is kind of depressing. I am however very grateful for everything that I have and appreciate that others haven't been so lucky. Having said that, everything I have has been hard earned, with some risk taking over the years. So tosullivan, have you thought of just spending it?
Click to expand...

Im intrigued to who the shares are in!!
 
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