# What to do with excess cash on deposit.



## MBags (2 Dec 2014)

Hi all.

I am posting because I am at a loss as to what my next steps should be.

I'm 27, earning 50k per annum, and after rent/bills I have been able to save 23k over the last couple of years.  At the moment I am saving 1,000 euro per month into a regular saver account - the balance of which is 8,000 - and the rest (13,000 euro) is in a notice account.

The regular saver earns interest at 3.5% and the notice account at 2%.  

I get the feeling that at my age I should be doing more with my money.  With the regular saver, I am building up a nice deposit for a down-payment on a house in about 4 years.  But I do not know what to do with the money which is currently sitting in a deposit account earning 2% variable. 

Should I keep my money where it is or would it be better elsewhere?


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## punter (4 Dec 2014)

I'm a lot older but also keep some money on deposit (50k) and save about 2k per month. This is apart altogether from any money I have in shares etc. 

I struggle with the same dilema you have. I want a higher return, want capital secutity and don't want long (greater than 30/40 days) notice. 

I have distributed the sum on deposit across acounts in 2 institutions to keep it within the caps they impose on their higher interest accounts, and I also have some in prize bonds (approx 20K). My monthly savings are again spilt between 2 institutions to keep them within the caps imposed on the higher interest regalar savings accounts, and I also have a standing order for 500 worth of prize bonds each month. 

The rates of return you are achieving are pretty respectable in the current market. 

So in summary, I do much the same as you, with some prize bonds added in.

I'd be interested to hear if anybody has a different higher yield strategy.


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## tech (5 Dec 2014)

Hi there

I have some funds that have recently matured from PTSB / KBC 90k and haven't re invested this yet as I want to get a better return than 1.93% on deposit

Im also looking at buying some prize bonds, have you every won from these?? can i cash them in when ever I want??

i also looking at investing in some bonds with blackbee.ie

any more thoughts?


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## Lightning (5 Dec 2014)

It is very easy to get a bigger yield than 1.93%. 



punter said:


> I'd be interested to hear if anybody has a different higher yield strategy.



The way to achieve the highest yield possible with deposit accounts is to maximise your regular saver deposits. 

Only look at term deposit accounts, instant access account and notice accounts after you have maximised your regular saver contributions to regular saver accounts that pay more than term deposit accounts, instant access account and notice accounts. 

Priority 1 is Nationwide UK which pays 4.00%. 
Priority 2 is KBC regular saver which pays 3.5%. 
Priority 3 in PTSB Online regular saver which pays 2.5%. 
Priority 4 is PTSB 21 Day Notice Regular Saver which pays 2.5%. 
Priority 5 is opening a second PTSB  21 Day Notice Regular Saver account. 
Then priority 6 is deposit accounts that pay more than the remaining regular saver products. Start with Nationwide UK (Ireland) 3 year term deposit account which offers *instant access* subject to a 90 day interest penalty for a great 2.20%. 

Prize bonds pay a dreadful 1.25% and the chances of winning a big prize are very very low.


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## Eithneangela (5 Dec 2014)

Wondering if the comparative rates paid for deposits as shown in the excellent regular Best Buy feature between State Savings and commercial institutions includes the 4% PRSI?


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## Lightning (5 Dec 2014)

Eithneangela said:


> Wondering if the comparative rates paid for deposits as shown in the excellent regular Best Buy feature between State Savings and commercial institutions includes the 4% PRSI?



2 comparative rates are included. 

One for those that are taxed at 41% and one for those that are taxed at 45%. The 45% rate includes PRSI at 4%. Very few people will be subject to PRSI on deposit interest.


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## dub_nerd (8 Dec 2014)

CiaranT said:


> It is very easy to get a bigger yield than 1.93%.
> 
> The way to achieve the highest yield possible with deposit accounts is to maximise your regular saver deposits.
> 
> ...


I find the hassle of all those extra accounts aren't worth it with the current rates and tax regime. Compared to a Rabo 90-day notice account at 1.95%, a 2.5% regular saver only delivers an extra 0.3% after tax. Given that you can generally only save up to €1,000/month, the difference only amounts to €150/year _after_ you've spent 4 years accumulating €50,000. The Nationwide UK might be worth having, but the rest are marginal.


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## TomOC (8 Dec 2014)

dub_nerd said:


> I find the hassle of all those extra accounts aren't worth it with the current rates and tax regime. Compared to a Rabo 90-day notice account at 1.95%, a 2.5% regular saver only delivers an extra 0.3% after tax. Given that you can generally only save up to €1,000/month, the difference only amounts to €150/year _after_ you've spent 4 years accumulating €50,000. The Nationwide UK might be worth having, but the rest are marginal.




Agreed.  I had a list of all the top paying regular savers about 5 years back.  I just finished with nationwide UK's regular saver now and have no plans on any more, not worth the hassle.  Rabo is starting to look poor now too.  I had an account with them from years ago and opened their 1.95% account (90 day notice) a month back and transferred in.  Its rate is heading down to 1.7% though in Feb.  
TSB bonus booster (and I think most of their savings accounts) makes you go to branch to withdraw over 5000 Euro which puts me off that account. TSB also charged me in branch for SEPA transfer (only 50cent)  

Savings options now are very poor


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## MBags (8 Dec 2014)

CiaranT said:


> It is very easy to get a bigger yield than 1.93%.
> 
> 
> 
> ...



Is this really the best strategy?  For example, the Nationwide account is only for 15 months, adding 1k p/m.  How does this compare to leaving 15k in a 15 month deposit account @ 1.95% fixed.  I can't find a reliable calculator for regular savers.


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## Gervan (9 Dec 2014)

> the Nationwide account is only for 15 months, adding 1k p/m.  How does  this compare to leaving 15k in a 15 month deposit account @ 1.95% fixed



 €15K for 15 months at 1.95% works out at €365 interest gross.

If you have €15K sitting in an instant access account at 1.75%, and feed €1000 each month into your Nationwide UK account you should have €425 gross interest after 15 months.
€375 from the Regular Saver and another €70 from the instant access account.


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## Lightning (9 Dec 2014)

Exactly. One needs to factor in the rate that you is getting on the account that you are using to drop feed into the regular saver account.


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## MBags (9 Dec 2014)

Gervan said:


> €15K for 15 months at 1.95% works out at €365 interest gross.
> 
> If you have €15K sitting in an instant access account at 1.75%, and feed €1000 each month into your Nationwide UK account you should have €425 gross interest after 15 months.
> €375 from the Regular Saver and another €70 from the instant access account.



Thanks for explaining that!  How did you calculate the €425 return on the regular saver, none of the online calculaters I have been using come up with that figure.  In fact, each one i have used comes up with a different figure!


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## Gervan (9 Dec 2014)

> How did you calculate the €425 return on the regular saver,



It's not the interest on the Regular Saver alone, but the sum of interest on both accounts together, when you start with €15,000 in a "feeder" account.
If you are saving €1000 per month out of your salary the interest will only be €375.

Regular Saver:
€15,000 x 4% x 15 / 12 (to account for 15 months, at an annual rate of 4%)x 1/2 (to account for the fact there is an average of €7,500 when depositing €1000 each month) is €375 in interest.  

Feeder instant access account:
€15,000 x 1.75% x 15 / 12 x 1/2 is €164!
Why did I get €70 before? I think my fingers must have entered 0.75% interest rather than 1.75%.

So actually the gross interest earned in 15 months would be €539, an annual rate of about 2.87%.
I hope I'm right this time.


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## MBags (16 Dec 2014)

CiaranT said:


> Priority 1 is Nationwide UK which pays 4.00%.
> Priority 2 is KBC regular saver which pays 3.5%.
> * Priority 3 in PTSB Online regular saver which pays 2.5%. *
> * Priority 4 is PTSB 21 Day Notice Regular Saver which pays 2.5%. *
> ...



Given the recent PTSB cuts, options 3, 4, 5 don't seem to be worth it any-more. 




CiaranT said:


> Market inflation forecasts, for the next 10 years, in the EU, are for a rate below 2%.



This makes the Nationwide UK 3 year term deposit @ 2.2% even more appealing!


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## galwegian44 (16 Dec 2014)

tech said:


> i also looking at investing in some bonds with blackbee.ie



Hi Tech (No pun intended!),

Have you had any experience with Blackbee.ie? They've been recommended to me through a contact that is setting up a pension for me but they're a new company to the market as far as I can see so not a lot of history there, although the Board of Directors seem pretty impressive for a startup company.

I shot them off an email a couple of weeks ago but haven't heard anything from them in the interim.

Do you have any info on them and/or do you know the minimum investment fund that they will work with?

Thanks in advance.


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## MrEarl (17 Dec 2014)

galwegian44 said:


> ....I shot them off an email a couple of weeks ago but haven't heard anything from them in the interim.....




The absence of good customer service says a lot, imho


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## tech (26 Dec 2014)

I dont know much about them but would like to see the options they offer


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