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The Financial Column

Welcome to the Financial Column in association with award winning company Money Plus, Bridge St, Boyle.

Q: I have €53,000 on a 1 month deposit with my bank. The interest rate is only 0.10% before tax. Even by shopping around and putting it on in a 12 month deposit it will still earn only 0.90% gross.
What do you advise I should do with it?

A: This is an issue facing deposit account holders at present. Interest rates are at an all time low and close to zero, regardless of the time you invest your money for. In some Eurozone countries they are now charging depositors for keeping money on deposit. Furthermore there is little or no prospect that deposit rates rising significantly in the short term, i.e. the next 12 – 18 months, and possibly, in the medium term, the next 2-3 years.

What are the alternatives ?
In summary, the best way to determine the most suitable option(s) for you and for your surplus deposit is to sit down with an experienced and impartial financial adviser like Money Plus to establish your particular objectives and arrive at a solution which suits your particular circumstances.

This involves discussing and considering the following:
What is this money for and how does it relate to your overall personal financial circumstances ?
Do you need to have access to this money or are you prepared to invest some or all for a longer period of time to achieve a better return ? If so, how long and what flexibility do you need to access this money?
Do you have other investments/property/deposits etc.?
What investment experience have you had in the past, if any, and how did this work out ?
What are your investment objectives for this money?
What return would you like to achieve from this sum?
What risk, if any, are you prepared to take to try and achieve your targeted returns and how would this affect your overall financial position if you don’t achieve this?

As an example, if, on answering the above, your deposit money is surplus to your current needs and that you do not require access to this money for, say, up to 5 years, then our recommendation would be to for you to consider medium term investments, compatible with your risk and return objectives.

There are a number of investment products available in the market place, depending on your answers to the above, which may suit your circumstances, such as :
Post Office Savings Bonds.
Capital protected/partially protected investment/tracker bonds.
Unit-linked investment bonds, typically these can range from low risk, cautious investment funds, to risk controlled multi-asset funds, to specialist funds such as Equity and Property Funds.

For advice on deposit accounts and investments please consult Belinda McCauley at Money Plus, your local independent financial broker. Belinda and her colleagues at Money Plus, Bridge St, Boyle would be delighted to help you. Belinda can be contacted at 071-9194000/086-7847827 or by email: [email protected]

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