# KBC regular saver maxed out



## Bagman (13 Jan 2020)

Hi there,
I have had a KBC regular saver for some years now and have built it up to just under the 40k cut off where the interest rate drops off dramatically. The interest rate is currently 1.25%. I dont want to go over 40k in the account. Should I
1. Withdraw a small amount to say 38k and then change to the minimum monthly contribution of €100 to maintain what would be essentially a decent rate for an on demand deposit account. Or
2. Take out the 40k and look elsewhere for a better return. I dont need the money in the short term.
Any advice would be much appreciated.
Cheers.


----------



## Lightning (14 Jan 2020)

Option 1. 

There are very few rates out there (short or long term) that are as good as this.


----------



## Bagman (14 Jan 2020)

Cheers Ciaran for your reply.
I had thought as much.
I'm going to reduce the monthly savings to the minimum €100 and keep the account under the 40k threshold.
Any suggestions as to where to put the balance of my regular monthly savings, approx €750 p/m
KBC's suggestion is their 'start to invest' monthly saver, essentially a global ETF, I presume I need to be wary of charges with a product like that?


----------



## Zenith63 (14 Jan 2020)

Something like the 5 year state savings certificates (https://www.statesavings.ie/our-products/5-year-savings-certificates) might be an option.  0.98% AER, but that is tax free so (assuming you are liable for DIRT) you're getting more like 1.6% if you compare it to DIRT liable bank savings.  You can get your money out with a few days notice if required, it's not locked in, but you won't earn as much of the interest if you don't hold it for the full term.

Also worth considering if you have any debt (car/mortgage etc) you'll usually be better off paying that down as again the "return" is tax free, so will be higher than the loan interest rate might indicate.


----------



## Bagman (14 Jan 2020)

Zenith63 said:


> Something like the 5 year state savings certificates (https://www.statesavings.ie/our-products/5-year-savings-certificates) might be an option.  0.98% AER, but that is tax free so (assuming you are liable for DIRT) you're getting more like 1.6% if you compare it to DIRT liable bank savings.  You can get your money out with a few days notice if required, it's not locked in, but you won't earn as much of the interest if you don't hold it for the full term.
> 
> Also worth considering if you have any debt (car/mortgage etc) you'll usually be better off paying that down as again the "return" is tax free, so will be higher than the loan interest rate might indicate.


Thanks for your reply, much appreciated. Had considered that and I will use some of the monthly savings to overpay on the mortgage but to be honest it's very manageable and the rate is pretty good at 2.6%. No other loans thankfully. As I will have the 40k in cash savings at 1.25% I am happy to take on some risk starting a new monthly saver, hence a ETF based fund appeals to me rather then the safer returns you mention.


----------



## Zenith63 (15 Jan 2020)

Mikemoran said:


> Thanks for your reply, much appreciated. Had considered that and I will use some of the monthly savings to overpay on the mortgage but to be honest it's very manageable and the rate is pretty good at 2.6%. No other loans thankfully. As I will have the 40k in cash savings at 1.25% I am happy to take on some risk starting a new monthly saver, hence a ETF based fund appeals to me rather then the safer returns you mention.


Do you have a pension?  If you choose the right one you should have access to a decent array of funds that will give you full equity exposure but with an initial bump of ~50% (because contributions go in tax free) and tax free growth.  I'm quite big into investing in shares and seeing a couple of grand a month going into equities this way more or less scratches my stock market itch.

I have a small DeGiro account for buying and holding a few ETFs and a small spreadbetting account where you can take a small gamble on whatever share you think is cheap this month without tax implications.  Again just to scratch the itches of wanting to invest in the stockmarket, but the vast majority of savings go to mortgage/pension because the gains here are virtually impossible to beat with post-tax money in the markets.

Took me a long time of reading AAM to get to this conclusion, I was previously of the view that your mortgage is the cheapest debt you'll ever get so why pay it down early when there are such tasty returns to be had in the stockmarket and why lock money away in a pension where it is inaccessible for decades (getting older and realising early retirement age is not so long away solved this one!).


----------



## Bagman (15 Jan 2020)

Zenith63 said:


> Do you have a pension?  If you choose the right one you should have access to a decent array of funds that will give you full equity exposure but with an initial bump of ~50% (because contributions go in tax free) and tax free growth.  I'm quite big into investing in shares and seeing a couple of grand a month going into equities this way more or less scratches my stock market itch.
> 
> I have a small DeGiro account for buying and holding a few ETFs and a small spreadbetting account where you can take a small gamble on whatever share you think is cheap this month without tax implications.  Again just to scratch the itches of wanting to invest in the stockmarket, but the vast majority of savings go to mortgage/pension because the gains here are virtually impossible to beat with post-tax money in the markets.
> 
> Took me a long time of reading AAM to get to this conclusion, I was previously of the view that your mortgage is the cheapest debt you'll ever get so why pay it down early when there are such tasty returns to be had in the stockmarket and why lock money away in a pension where it is inaccessible for decades (getting older and realising early retirement age is not so long away solved this one!).


Thanks for your reply. I do have a pension, which I contribute the same amount to each month as I do my regular saver, approx €950. No doubt a good option to increase my contribution there though. Yes it's always tempting to leave the mortgage as is when its manageable but it makes sense to look at overpaying it as an investment in itself.


----------



## Bagman (15 Jan 2020)

Zenith63 said:


> Do you have a pension?  If you choose the right one you should have access to a decent array of funds that will give you full equity exposure but with an initial bump of ~50% (because contributions go in tax free) and tax free growth.  I'm quite big into investing in shares and seeing a couple of grand a month going into equities this way more or less scratches my stock market itch.
> 
> I have a small DeGiro account for buying and holding a few ETFs and a small spreadbetting account where you can take a small gamble on whatever share you think is cheap this month without tax implications.  Again just to scratch the itches of wanting to invest in the stockmarket, but the vast majority of savings go to mortgage/pension because the gains here are virtually impossible to beat with post-tax money in the markets.
> 
> Took me a long time of reading AAM to get to this conclusion, I was previously of the view that your mortgage is the cheapest debt you'll ever get so why pay it down early when there are such tasty returns to be had in the stockmarket and why lock money away in a pension where it is inaccessible for decades (getting older and realising early retirement age is not so long away solved this one!).


One final question Zenith, the DeGiro account for purchasing ETFs, I presume this works out a lot cheaper than for example KBCs version? Also, is it straightforward to sort out the tax implications.
Following advice here I'm thinking my regular saver amount will be divided equally 3 ways
1. Overpay mortgage 
2. Increase pension
3. Set up regular saver following an ETF via KBC (ease of set up, track via the existing app) or some other, probably cheaper, provider.


----------



## RedOnion (15 Jan 2020)

Mike,

Re mortgage.
You're borrowing at 2.6% in order to put the money on deposit at 1.25% which is subject to DIRT. You're throwing money away.
If you've no medium term need for the money, pay a lump sum off the mortgage.

KBC investment funds are not ETFs. Make sure you understand what they are and the fees associated. The one I looked at had a 1% subscription fee, and an ongoing annual charge of 1.6%. 
I use a similar life fund for a regular saving that I have for its convenience, but the charges eat into your return.

You haven't posted any details about your overall financial position, so it's impossible to guide you, but in general the taxation makes investing outside a pension somewhat unattractive to Irish investors. 

I'd maximuse pension, pay lump sum off the mortgage, and keep emergency cash fund in the regular saver account (making loads of assumptions to get there).


----------



## Zenith63 (16 Jan 2020)

Mikemoran said:


> One final question Zenith, the DeGiro account for purchasing ETFs, I presume this works out a lot cheaper than for example KBCs version? Also, is it straightforward to sort out the tax implications.


I’m not familiar with the KBC investments, other than having a general sense that these types of investments done through your retail bank tend to be heavily loaded with fees and invested in such low risk assets that the returns will be very underwhelming.

Looking at the KIDD ( [broken link removed] ) for the fund KBC reference on their site (not sure if you get a choice of others) they take 2.5% of anything you invest then 1.68% every year after that. This fund is 55% equities, 45% bonds (very conservative).

With the likes of DEGIRO, to buy say the iShares S&P500 ETF would be 0% when you buy then 0.07% per annum ETF internal fee. You can choose from hundreds of shares and ETFs to suit you, though an S&P500 and MCSI World Index ETF is usually enough.

If you’re doing a tax return anyway I don’t think it’s that big a deal to handle the ETF stuff. If you’re not, then yes there’s a bit of extra effort, but then that applies for most investments beyond bank stuff or government savings certs.


----------



## Gervan (16 Jan 2020)

Is there an option to buy a €1000 5 yr savings bond every month? If for any reason one needed the money before term end, at least only some of the investment would have reduced interest paid out.


----------



## Zenith63 (16 Jan 2020)

Gervan said:


> Is there an option to buy a €1000 5 yr savings bond every month? If for any reason one needed the money before term end, at least only some of the investment would have reduced interest paid out.


Once you’ve bought your first batch (a paper form), you can then buy online very easily with a debit card each month. I didn’t see anything about automating this to happen each month however.

The T&Cs mention partial redemptions, so I don’t think there’s a requirement to take all your money out in one go, if you needed to get some early.


----------



## Ceist Beag (16 Jan 2020)

Isn't the maximum amount €50K for the regular saver account with KBC - not €40K? See https://www.kbc.ie/our-products/savings-and-investments/regular-saver


----------



## HollowKnight (16 Jan 2020)

Ceist Beag said:


> Isn't the maximum amount €50K for the regular saver account with KBC - not €40K? See https://www.kbc.ie/our-products/savings-and-investments/regular-saver


The above €40k limit is with the extra regular saver account. (It has a better interest rate)


----------



## Bagman (16 Jan 2020)

RedOnion said:


> Mike,
> 
> Re mortgage.
> You're borrowing at 2.6% in order to put the money on deposit at 1.25% which is subject to DIRT. You're throwing money away.
> ...


Thanks RedOnion, I presumed it was an ETF as tax wise it's the same issue of declaring every 8 years but fair enough if not, I must research it more. Charges you mention sound about right, so €10 of every €1000 gone straight away + management charge on top.


----------



## RedOnion (16 Jan 2020)

Mikemoran said:


> so €10 of every €1000 gone straight away


Actually there might be a 2nd 1% gone straight away. I think there's a 1% charge from KBC, and also the government levy of 1%. I'm not very familiar with the KBC products, so someone else might be more familiar.


----------



## Bagman (16 Jan 2020)

Zenith63 said:


> I’m not familiar with the KBC investments, other than having a general sense that these types of investments done through your retail bank tend to be heavily loaded with fees and invested in such low risk assets that the returns will be very underwhelming.
> 
> Looking at the KIDD ( [broken link removed] ) for the fund KBC reference on their site (not sure if you get a choice of others) they take 2.5% of anything you invest then 1.68% every year after that. This fund is 55% equities, 45% bonds (very conservative).
> 
> ...


Once extra mortgage and pension payments sorted, this sounds exactly like what I'm looking for, are accounts easy to set up and track? Those fees are very low compared to bank products. I presume you just give your annual statement to accountant to sort out the tax? Thanks for all advice.


----------



## Zenith63 (17 Jan 2020)

Mikemoran said:


> Once extra mortgage and pension payments sorted, this sounds exactly like what I'm looking for, are accounts easy to set up and track? Those fees are very low compared to bank products. I presume you just give your annual statement to accountant to sort out the tax? Thanks for all advice.


Very easy to setup, all online even the ID verification just requires uploading photos of your passport. Make sure to tick the box to get a ‘Custody’ account though as you go through, gives you extra protection if DEGIRO ever got into difficulty (other threads cover this here).

Personally I’d setup the account now and just stick a couple of hundred quid in there to scratch your investing itch, and begin to understand how it all works, then focus on mortgage/pension.


Yes an accountant will sort it out very easily as part of a tax return.


----------



## Bagman (17 Jan 2020)

Thanks so much for all the advice, much appreciated. Looking into a DeGiro account now and will use it for small monthly amounts, will use the bulk of the regular savings on mortgage overpayment and pension top up. Many thanks.


----------



## 50andOut (7 Feb 2020)

Mike

Have you a partner? I think you can open 1 extra saver in your name and another in a joint name under the same current account

I am 10k away from the 40k threshold, but planned to look into that option as I draw near.

50+O


----------



## Balfour (16 Apr 2020)

Hi

What’s happens if I accidentally go over the 40k in the year, does that mean I lose the higher interest for the following period in the same year


----------



## HollowKnight (20 Apr 2020)

I think you get the higher rate on up to the 40k and anything over is the low rate.


----------



## Balfour (20 Apr 2020)

HollowKnight said:


> I think you get the higher rate on up to the 40k and anything over is the low rate.


That was my opinion but I have found out since that if your balance is over 40k at the start of the year, say the 1st Jan and it stays over the 40k for the 12 months, you get the lower rate of 0.01%


----------



## HollowKnight (20 Apr 2020)

Oh that's nasty. But not surprised by KBC.


----------



## Balfour (20 Apr 2020)

Balfour said:


> That was my opinion but I have found out since that if your balance is over 40k at the start of the year, say the 1st Jan and it stays over the 40k for the 12 months, you get the lower rate of 0.01%


Also, I can’t find where the above is noted in the T&C


----------



## Balfour (20 Apr 2020)

HollowKnight said:


> Oh that's nasty. But not surprised by KBC.



Too right, on approx 50k last year, I got €4.00 in interest


----------



## RedOnion (20 Apr 2020)

Balfour said:


> Also, I can’t find where the above is noted in the T&C


84.11.8 If the Account balance exceeds €40,000 (including interest credited to the Account), the entire balance 
will earn interest at the then prevailing Standard Demand Deposit Account interest rate as per our Personal 
Deposit Rate Matrix. Your Standing Order(s) will continue to fund your Extra Regular Saver Account. We will 
not provide any notice to you in this respect.


----------



## Balfour (20 Apr 2020)

RedOnion said:


> 84.11.8 If the Account balance exceeds €40,000 (including interest credited to the Account), the entire balance
> will earn interest at the then prevailing Standard Demand Deposit Account interest rate as per our Personal
> Deposit Rate Matrix. Your Standing Order(s) will continue to fund your Extra Regular Saver Account. We will
> not provide any notice to you in this respect.


See attached, summary of interest rates changes in 2019 that I received with my statement, why do they clearly high light “ up to 40k” and over 40k
Why not just note, if the balance goes over 40k, 0.01% will apply to ALL the balance 
Thanks


----------



## RedOnion (20 Apr 2020)

Balfour said:


> Why not just note


I've no idea.

It's clear enough in their interest rate sheet, so I don't know why it's not as clear on their rate change notification. Maybe since it's in the T&C's they think it's clear enough.

[broken link removed]


----------



## Balfour (21 Apr 2020)

Hi Red Onion

The following link is dated March 2020

[broken link removed]

I have attached pictures of their Rate Matrix dated Nov 2019, there is no mention of extra regular saver and in particular "what happens if the balance goes the 40k"

Thanks


----------



## RedOnion (21 Apr 2020)

Hi Balfour,

I don't work for KBC, nor do I have one of these accounts. You said there no reference to it in terms & conditions. There is, or at least in the current version. But given this has been discussed previously, I doubt it was a secret:




__





						KBC Extra Regular Saver threshold
					

In the best buys post for deposits, the following it's written:  "2.10%* on €1 to €40,000 0.01% up to €1,500,000 on the whole balance if the balance exceeds €40,000"  Also, in KBC's term and conditions:  "Once the balance reaches €40,000 (including interest credited to the account), the full...



					www.askaboutmoney.com
				




If you genuinely were never provided t&C's with this treatment, or otherwise notified of it, then I'd be making a complaint to the bank about it.


----------



## faketales (10 May 2020)

I'll be in the same situation in a few months so have started looking into this. Someone mentioned opening a second joint account, that's not permitted:

*



			How many Extra Regular Savers can I hold?
		
Click to expand...

*


> Only one Extra Regular Saver, either in your sole name or joint name is permitted per individual.



[broken link removed]

While the National State Savings are attractive I don't have a mortgage yet so don't really want to tie any money up.

The next best I can see is Permanent TSB that gives 0.90 up to 50k.

https://www.permanenttsb.ie/saving-and-investing/savings-accounts/online-regular-saver/

It says you need to be a TSB customer and register for Open24 however I'm not sure if that means I need to open a current account and pay fees in order to avail of the 0.9%



> This savings account is available online so you need to be a permanent tsb customer who is registered for Open24 to access it.


----------



## RedOnion (11 May 2020)

faketales said:


> While the National State Savings are attractive I don't have a mortgage yet so don't really want to tie any money up.


2 comments:
State savings are accessible with very short notice. You get very little interest, but you're not locking the money away, untouchable.

You asked another question about the bonus interest from UB for drawing a mortgage, and you mentioned mortgage again here. UB and BOI both have bonus interest for mortgage regular savers, and the regular saver isn't too bad with either. Nobody knows how long the bonus interest will last of which bank will have the best mortgage rate by the time you want a mortgage, but it wouldn't be the worst idea in the world to open one with each and maybe get a bonus in the future.


----------



## faketales (11 May 2020)

Thank you. 

Good point about the state savings, I imagine I will need the money within 5 years so I think I will end up with the low interest rate.

I'll look into both BOI and UB accounts with bonus interest for regular savers.


----------



## Balfour (11 May 2020)

faketales said:


> I'll be in the same situation in a few months so have started looking into this. Someone mentioned opening a second joint account, that's not permitted:
> 
> 
> 
> ...



for what it’s worth, reduce your monthly savings so you do not exceed the 40k, if you exceed the 40k, the lower interest applies on the total amount.


----------



## dovetail (12 May 2020)

Just in relation to some of the posts above for KBC regular savers, its says  50k limit in the link  below. It also says 'Only one single and one joint Regular Saver Account permitted per individual'. 
https://www.kbc.ie/our-products/savings-and-investments/regular-saver 
'Information correct as of 28th November 2019.'

perhaps these terms are only available to new customers / new accounts?!


----------



## RedOnion (12 May 2020)

dovetail said:


> , its says 50k limit in the link below


Different products. The 40k limit applies to the 'Extra' Regular Saver.


----------



## Kilconleagirl (19 May 2020)

Just got letter today, regular saver interest being reduced from 1.25% aer to.75%


----------



## Lightning (19 May 2020)

Kilconleagirl said:


> Just got letter today, regular saver interest being reduced from 1.25% aer to.75%



Thanks for posting this. 

I have not got the letter yet. 

KBC have not posted the rate change on their website yet either.

What date did the letter say the rate change applies from?


----------



## faketales (19 May 2020)

That's disappointing but not that surprising I guess.


----------



## MarkKildare (20 May 2020)

CiaranT said:


> What date did the letter say the rate change applies from?



20th of July, surprised it didn't come sooner.


----------



## Balfour (20 May 2020)

Effective from the 20th July 2020


----------



## adox (20 May 2020)

Got the same letter this morning.  It’s applicable from July 20th. 
Also they made a mess of their app on Android as well with the latest update so I haven’t had a good week with them.


----------



## Temple (20 May 2020)

Kilconleagirl said:


> Just got letter today, regular saver interest being reduced from 1.25% aer to.75%


I got a letter saying my Extra Regular Saver Account interest rate is being reduced from 1% to 0.5% from July 20th.
Why would rates be different?!


----------



## RedOnion (20 May 2020)

Temple said:


> I got a letter saying my Extra Regular Saver Account interest rate is being reduced from 1% to 0.5% from July 20th.
> Why would rates be different?!


Does it say the bonus is reducing from 1% to 0.5%?
The 1.25% includes the bonus of 1%.


----------



## adox (20 May 2020)

It says it’s reducing the rate from 1% to .5% AER. The bonus rate is applied on to @.25%.  New total rate will be .75% AER.


----------



## pauric (20 May 2020)

Is this still the best regular savings account now or are there other better options available given this new rate decrease?


----------



## ATC110 (20 May 2020)

pauric said:


> Is this still the best regular savings account now or are there other better options available given this new rate decrease?


As it stands, PTSB and Ulster Bank offer the second and third highest rates


----------



## Temple (20 May 2020)

adox said:


> It says it’s reducing the rate from 1% to .5% AER. The bonus rate is applied on to @.25%.  New total rate will be .75% AER.


Thanks - and apologies. Had only glanced at the letter this morning. I see that now.


----------



## Temple (20 May 2020)

adox said:


> It says it’s reducing the rate from 1% to .5% AER. The bonus rate is applied on to @.25%.  New total rate will be .75% AER.





RedOnion said:


> Does it say the bonus is reducing from 1% to 0.5%?
> The 1.25% includes the bonus of 1%.


Thanks


----------



## ATC110 (21 May 2020)

Has everyone with a KBC RSA got a letter regarding the rate reduction?


----------



## Lightning (21 May 2020)

ATC110 said:


> Has everyone with a KBC RSA got a letter regarding the rate reduction?



I got one today.


----------



## Kilconleagirl (22 May 2020)

Sorry yes i had only recently opened a Kbc current account in order to avail of the 1.25% rate regular saver, was availing of the .25% bonus, pity it’s being reduced.


----------



## Ryan (25 May 2020)

I have €35k in the ordinary regular saver account and got a letter saying they are stopping the 1% bonus The Extra regular saver doesn’t seem like the right option due to the €40k limit so not sure what to do. Might look at state savings


----------

