# Where to put savings now that deposit rates are so low



## Black_Knight (14 Oct 2020)

Got a letter in the post advising of a change in interest rate on my savings account. We've 40k in savings at the moment, split between a ptsb online saver and an aib saver account. Both "earning" between 0.1->0.2% interest.

We're maxing out our pensions, overpaying the mortgage, and still contributing to our savings every month, but it seems rather pointless with these new rates.

In terms of accessible (no fixed terms) savings options, what is there?


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## Marc (14 Oct 2020)

How Do I Get The Best Return On My Savings? - Everlake
					

We strongly advocate that longer-term investments should be arranged via pensions and stock-market linked investment accounts.




					globalwealth.ie


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## Sarenco (15 Oct 2020)

Black_Knight said:


> We're maxing out our pensions, overpaying the mortgage, and still contributing to our savings every month, but it seems rather pointless with these new rates.


Why not simply further increase the monthly repayments on your mortgage by the amount you are saving every month?

€40k sounds like a very generous emergency fund unless you have very particular circumstances.


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## Black_Knight (15 Oct 2020)

Sarenco said:


> Why not simply further increase the monthly repayments on your mortgage by the amount you are saving every month?
> 
> €40k sounds like a very generous emergency fund unless you have very particular circumstances.



It's pretty generous alright. I'd be happy to move some of it where it can do a bit more good, but my other half is unwaveringly against that. Hence wanting to find alternative quick access options. A change of car could be on the cards in the next 6 months, so that'll eat potentially up to 20k of those savings, and my wife will be on unpaid maternity leave for a few months in the new year, so savings will stop then. Hence we're still adding to savings so we still have that emergency fund after those expenses.

Re: Mortgage payments, we're on a 5 year fixed mortgage with 4 years remaining. We can overpay by up to 10% of the remaining balance, so there's room there to overpay even more.

So there's some "money makeover" possibly required (another thread perhaps) to better use our monthly surplus, but that doesn't help with what to do with the ~40k we have earning 0.2% interest at the moment.


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## Sarenco (15 Oct 2020)

If it's any consolation, inflation is currently negative so you are not losing money in real terms, even at minimal deposit rates.


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## MugsGame (20 Oct 2020)

I wonder has anyone entertained claiming a DIRT tax credit on negative interest?!


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## discovery101 (23 Oct 2020)

Pay off as much from your debts that you have, do not be borrowing money in uncertain times.


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## Black_Knight (24 Oct 2020)

discovery101 said:


> Pay off as much from your debts that you have, do not be borrowing money in uncertain times.


Mortgage is the only debt. Would only consider borrowing if our expense (new car for example) ate up lots of our savings. Would like to retain some safely net (hence why we're still putting some into savings now)


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## Ryan (25 Jan 2021)

Do you have any small loans to clear?  Otherwose increase your mortgage repayments


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## Black_Knight (25 Jan 2021)

Ryan said:


> Do you have any small loans to clear?  Otherwose increase your mortgage repayments


As above, mortgage is our only debt. No small loans.

I should note, we've a house to inherit in the future, which will need some work. It's not in bad shape, but we'll want to externally insulate it, knock a wall or 2, downstairs toilet, probably replumb and probably rewire, ideally change the heat source from oil to a heat pump. Ballpark €100k needed for the above. Unsure on the term, grandparent in their 90s owns it and it'll be cascading it's way down through inheritance at some point.

Hence the easy access to savings. If we knew the house was 5-10 years away we'd probably put money into an investment fund, but for now it's savings and reducing the term on our mortgage (idea being to have it paid off before kids start college).


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## Ryan (25 Jan 2021)

Its always good to have some cash on hand. Don’t put everything on that inheritance because it’s so variable. What if the grandparent has to go into a nursing home or something? The house will partly go towards that


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## Sarenco (25 Jan 2021)

A deposit rate of 0% currently represents a real (after inflation) rate of +1%, with no tax to worry about.

That’s not bad by historical standards.


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## NoRegretsCoyote (25 Jan 2021)

Sarenco said:


> (after inflation)



You can't be sure yet  

Interest is earned forwards, inflation is measured backwards!


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## Black_Knight (26 Jan 2021)

Ryan said:


> Its always good to have some cash on hand. Don’t put everything on that inheritance because it’s so variable. What if the grandparent has to go into a nursing home or something? The house will partly go towards that



Wouldn't want to put everything into the inheritance house, but I guess ideally we'd get into it while the kids are young enough to appreciate the countryside and before schools make things difficult. The 100k guesstimate is just that, and we'd be willing to take a couple of years to do some of the work, though as I say, the kids age would guide us somewhat.

Nursing home is highly unlikely to happen, and if it did it would be financed through other means.


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