Putting House Deposit on Deposit

J

jambo.ie

Registered User
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I have got a deposit together for a house but I am holding off buying until the market settles down. I'll be heading off to Australia in the mean time and I want to leave the money somewhere safe. It looks to me like the best rates available for a sizeable lump are from Anglo.

Anglo offer different rates depending on how long you are leaving the money with them. The shorter the period the better the rate. I'm presuming this is because they are guaranteeing the rate for the term of the deposit and they would have to absorb any changes in the ECB base rate.

The rates are:
3 months 4.88%
6 months 4.86%
12 months 4.76%

Can I put the money on three month deposit and then redeposit each quarter? The implication being that if there any interest rate changes in a given quarter then I will have to pay these in the following quarter?

I understand I can get a few hundred quid extra by spreading the money around Rabo, First Active and Anglo but I have to decide if it's worth the bother.

Also, with the stupid way the interest is applied on this First Active account am I going to have to transfer the interest out each month to stay below €15,000? Is this going to attract extra costs?

And, I see EBS have a platinum account for investing over €150,000 which tracks the EURIBOR rate. At the moment the rate on this is 4.93% but it changes monthly.

Even better, I see the EBS fixed term rates actually look better than Anglo's. These are for €100,000 plus.

12 months 4.85%
9 months 4.88%
6 months 4.91%
3 months 4.94%
 
Bear in mind that Rabo's special rate of 5% on the first 10K ends in the new year. They are now paying 4.3% regardless of the size of the balance.
You will get much better than this if you're prepared to lock your money away for a few months.

On the other hand, Rabo have an excellent credit rating and this may be important for a large deposit.

Regarding First Active - yes, the 5.22% rate only applies if the balance is up to €15,000 - so you'll need to transfer money out each month. No charges apply for transfers.

Might be worth considering putting some money in FA though... for example:
* set up FA E-Saver with balance of €14,900 - rate is 5.22%
* set up FA Regular Saver with initial deposit of €1,000 - rate is 7.15%
* transfer €1,000 per month from the E-Saver to the Regular Saver (AFAIK this must be done manually)
* the extra interest you'll get will be €157 approx after-tax over the full year compared to a 12-month deposit at Anglo at 4.76%.
€15,900 will grow to €16,662 approx.

Of course you'll have to weigh up whether the extra interest is worth the manual effort... and the risk that rates drop in FA.
 
If interest rates start falling I think the housing market will take off again. If rates fall then it should be the right time to buy?

If I think rates are going to rise should I take the Anglo 3 month rate and renew it each quarter? This way I can re-evaluate each 3 months if it's the right time to buy a house.
 
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