Where to put lump sum (short-medium term)

Boulevardier

I would be interested to know what people would advise in a case where a substantial sum of money from a windfall (say an inheritance or pension lump sum) is being paid out. It would be declared for tax.

I do not mean whether to invest in property etc. I am thinking more of the best way to "park" the money between receiving it and deciding how to eventually use it.

If a person does not have an active deposit account, would it be mad to simply lodge it to your normal current account?

After that, would a bank deposit account or a post office (or some other type of account) be best?

The main criteria at this point would probably be minimising losses from inflation, DIRT tax or institutional risk. Actual "returns on investment" would be for a later day.

SBarrett

Stick it in a short term fixed rate deposit rate until you decide what to do with it. No point in taking short term risk. KBC offer 1.5% on 1 month notice accounts. Pretty stable bank too. If worried about the banks, spread it out. If it's short term, I wouldn't be overly concerned with making money. Inflation is low, interest rates are low and the government will take 41% of the little you make anyway.


Steven

JTMan

Boulevardier wrote: »

If a person does not have an active deposit account, would it be mad to simply lodge it to your normal current account?

Mad. You earn zero interest on the vast majority of current accounts.

Boulevardier wrote: »

After that, would a bank deposit account or a post office (or some other type of account) be best?

It seems that you want something short term. For short terms, banks pay better than NTMA ' Post Office deposits'.

SBarrett wrote: »

Stick it in a short term fixed rate deposit rate until you decide what to do with it. No point in taking short term risk. KBC offer 1.5% on 1 month notice accounts. Pretty stable bank too.

Not a good idea. Why earn 1.5% in a term account (it is not a notice account) when you can get 2% with instant access?

OP - I suggest you read this. I also suggest you consider how long you want to 'park' your money for.

Boulevardier

Brief update - some of the money has now arrived and has gone into current acct. New acct to be opened in about a week, but don't yet know what kind.

coylemj

Boulevardier wrote: »

Brief update - some of the money has now arrived and has gone into current acct. New acct to be opened in about a week, but don't yet know what kind.

If only to stop somebody from the bank phoning you to offer you some kind of deposit account, I'd move the money out of the current account.

They will phone you, believe me.

Drag00n79

JTMan wrote: »

I suggest you read this.

Great link. Thanks for that.