What's the Best Banking Option for My Requirements

ixoy

Looking to re-arrange my current banking investments as my money isn't doing anything for me as is.
I'm currently with BOI and I have all my money saved into a personal a/c where it's doing nothing and it's something I really should rectify.

What I'm looking for then is a higher rate of return on my savings. I'd want though a reasonable degree of access to my money, but it wouldn't have to be on-demand. Instead I'm thinking of a mortgage, so I'd want the lump sum to accumulate and be accessible at particular points (maybe on a monthly basis).

Obviously, a big must, is the ability to transfer a large amount directly into the account. Savings accounts are well and good, but I'd be drip feeding them my current account for years probably.

For general ease-of-use, RaboDirect or Northern Rock would seem to suit my requirements but I'm wondering if there are other better options that I'm not aware of - for example, splitting the money over two accounts to avail of interest rates (assuming there's no legal issue with this).

Also if I did move to say RaboDirect, is it better to just use that account or alternatively open an additional savings account and accumulate the higher returns there by dropping in monthly investments?
I'm thinking from the point of view of building a financial history record for a mortgage application - spreading my money over multiple accounts and banks (potentially) shouldn't affect it all, I'd have thought, but I'm unsure.

Ogham

One combination that might work is:
a) A Current a/c from Halifax paying 10% on balances upto 2000. Pay your income into this each month and use it to pay bills etc. This is not an introductory offer they say..

b) A regular saver a/c with Halifax - pays 7% - you have to pay in between 10 and 750 a month and you can make upto 2 withdrawls in a year.

c) An e-savings acc for lump sums from First Active - paying 5.22% on balances upto 15k
(For amounts over 15k - try Rabodirect - 5% )

These are probably the 3 best rates and overall conditions and terms around just now - not too restrictive.

See www.moneyguideireland.com

Mortmain

How much do you have, and how long an you put some of it away for? You can get 5% on balances up to 10k with Rabo, anything after slips to a nominal rate. Ulster Bank have a reward reserve account which pays 4.5% on balances between 10k & 250k, interest is paid quarterly and providing you maintain a minimum balance of 10k and make no more than 1 wihdrawal per quarter you get a bonus of .25% at the end of the year.

They have also just launched an e-savings account which pays 4.07%AER there are no restrictions and it takes literally minutes to set it up on line, perhaps more importantly the interest is paid to you monthly.

You could always look at a couple of investment options for at least part of the money. To give you an example, 5K would allow you to buy into the New Ireland Guaranteed Evergreen Fund. This is a six year fixed-term investment which guarantees you 100% capital security upon maturity. Initially 80% of your capital is invested in the Evergreen fund (which has never had a 6 year return of below 40% since 1976) and 20% in fixed-interest assets. During the course of the investment as much as 100%, or as little as 15% of your capital will be exposed to the fund depending on performance.

Average annualised returns to date are in the region of 13% p.a. Whilst there is an Annual Management Fee of 1.75% and Early Surrender penalties of 5%for year one,/4% for year two, /3% for year three, /2% for year four, /1% for year five and, /1% for year six, if you can leave the funds untouched for the full term, it will blow deposit rates out of the water.

Bear in mind that , with inflation being as is, any deposit account currently available will cost you money in the long term when it comes to the actual purchasing power of your money. In my mind that's a high price to pay for the peace of mind that access gives you, especially when one considers that access under low risk funds is available if necessary, albeit at a small price.

P.S. New Ireland have a similar product called the protected consensus bond which also offers a lock-in feature of 80% of the highest value of the fund, however the entry level for this product is 20K.

At the end of the day, risk is relative and historically, cash on deposit has always returned a negative value over a set period when adjusted for inflation. Hope this helps & good luck - it's a jungle out there.

If you are thinking of long term savings, there is a plan available through Canada Life called the Select save plan, you can save any amount for €100 to €5000 per month which can be adjusted at any time, you can select between 8 different funds (or any combination thereof) which range form low risk cash and gilt funds to high risk equity-based funds. You can encash any percentage of the policy at any time and the likelihood is that it will significantly outperform deposits (*past performance is not a reliable guide to future investment returns). Also if you can stick to it for 7 years, you get a bonus of 25% of the first years premium.

BuffyBot

You can get 5% on balances up to 10k with Rabo, anything after slips to a nominal rate

It drops to 3.75%. Not exactly nominal.

daveirl

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