Deposit advice required

Cyrus

Good morning all,

i have a relatively small amount of money circa 15k(but will be adding to it annually, within 5 years it will be a 6 figure sum or very close to it)

It will be for a house deposit, so security is paramount, however id also like a return to at least match inflation.

What are my options regarding a safe haven for this cash. State savings bonds are paying 10% net if you lock up for 3 years, but that seems risky at the moment, ditto any savings accounts from an irish state owned bank.

whats the best alternative, or are the above options less risky than people would have you believe

JTMan

How about half in an Irish bank and half in a foreign bank here.

There are 3 guides to deposit rates here:
http://www.askaboutmoney.com/showthread.php?t=90481

BrianD3

There's been a lot of hysteria about the safety of Irish bank and State Savings deposits. The reality is that the chance of depositers losing money is tiny as "burning" deposit holders would be politically unthinkable. There have been some good posts on AAM recently about this.

If you're worried about inflation risk from being locked in to a fixed term, the 5.5 year State Savings certs pay interest every 6 months and require 7 days notice for withdrawals. So it's not a disaster if you feel the need to withdraw early.

I would put the 15k in a 5.5 year cert and forget about it. The annual savings - are they building up in a Regular Saver account through the year? You're probably aware of this but if the advertised rate is, say, 4% gross and you save 12 x 1000 euros into the account during the year, you won't get 4% of 12k, It'll be around 2% of 12k.

Obviously the 12k + 2% gross interest can then be put in a fixed term account. But I would be interested to hear your strategy for maximising interest during the year, "dripfeeding" etc.