# Putting all savings in NTMA?



## ATC110 (16 Nov 2020)

Considering PTSB and now KBC have reduced their already low savings rates, NTMA seems to be the best option paying 0.15% and drip feeding an Ulster Bank Home Saver account.

Is it advisable to consolidate savings and put them all in a state owned deposit facility?

It appears negative interest will be standard soon and I think it will provide an opportunity for the government to apply a deposit levy to fund the huge public spending debt it is incurring.


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## NoRegretsCoyote (16 Nov 2020)

My (completely amateur) view is that state savings will never see negative rates, or any kind of levy either.

They were a very good source of funding during the financial crisis when financial market borrowing evaporated.

Also politically very unpopular. Greece defaulted on international finance in 2012 but never touched small Greek retail bonds.


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## fayf (16 Nov 2020)

If one is not interested in any form of risk, State savings are one of the alternate - risk free options. But better to pay off any debt first, as that will have a much higher rate attached.

Take the 10 year state savings, 16 % guaranteed with zero DIRT, there is no other product that gives a nett 16 % into your hand after 10 years- totally risk free, & capital guaranteed. In addition, you can withdraw and exit early and all your initial investment back, but, may not keep up with inflation, but significantly better, than what any bank will give you, and bank are all subject to DIRT of 33%, so even if you managed to get say 0.75 % from a bank, DIRT knocks off one third of this, giving you just a nett 0.50 %.

10 years is a long time, and one could probably, do a lot better with equities, or, get up to 40 % tax relief on a pension contribution + equity growth.

Personally, if i had debt, i’d pay that off first, and then, increase pension contributions, possibly invest something in EII (40% tax relief available), which comes with risks, then, have a risk mixture for whatever is left, emergency cash funds, some in state savings, some in medium risk investments.


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## Slim (17 Nov 2020)

fayf said:


> ...possibly invest something in EII (40% tax relief available), which comes with risks, then, have a risk mixture for whatever is left, emergency cash funds, some in state savings, some in medium risk investments.


Might I ask what EII is? Thanks.


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## fayf (17 Nov 2020)

Employment Investment Incentive.

Basically you invest in Irish Companies, who increase their headcount. Some of these are new, some are growing.

You can get 40% PAYE tax relief on your investment - it is a 4 year term. But 40% of your investment, is refunded to you by way of a PAYE refund,, when you do your tax return. This changed last year, as initially, you only got 3/4 of the tax relief in the year of investment, and a further 1/4 in the 4th year. From Oct 2019, you get the full 40% tax relief in the year you invest.
Typically, a Company might envisage say 10 to 20% return after 4 years, so if this is achieved, you would be a getting 50% +effectively.
There are risks of course, many of these companies are startups, or in an early growth phase. Even if the return is zero, and you only get your capital returned, you still get 40% tax relief. That looks quite attractive when banks are paying zero. However, there are risks attached. Several brokers and Finance houses offer EII schemes this, so shop around.

[broken link removed]


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## PMU (18 Nov 2020)

Marc Westlake recently published an analysis of NTMA savings products https://globalwealth.ie/news-and-views/how-do-i-get-the-best-return-on-my-savings


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## Zoe Fitz (27 Nov 2020)

ATC110 said:


> Considering PTSB and now KBC have reduced their already low savings rates, NTMA seems to be the best option paying 0.15% and drip feeding an Ulster Bank Home Saver account.
> 
> Is it advisable to consolidate savings and put them all in a state owned deposit facility?
> 
> It appears negative interest will be standard soon and I think it will provide an opportunity for the government to apply a deposit levy to fund the huge public spending debt it is incurring.



Having read on this website about Ulster Bank's Home Saver I tried to open one online  When I couldn't I consulted UB Branch and was given a copy of UB's Personal Banking T&Cs.  On p. 23  point 8 of which is stated:

"You may only open Home Saver if you are resident in Republic of Ireland and saving to purchase your principal primary residence".

Too bad!


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## ATC110 (27 Nov 2020)

Zoe Fitz said:


> "You may only open Home Saver if you are resident in Republic of Ireland and *saving to purchase your principal primary residence*".



That is way open to interpretation. It's just marketing - they'll be glad of your money.


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## NoRegretsCoyote (27 Nov 2020)

ATC110 said:


> they'll be glad of your money.



Those days are long gone.

Banks are drowning in deposits now and are charged to park them overnight.

They only encourage saving for a mortgage because they'll get a borrower at the end of the process.


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## ATC110 (27 Nov 2020)

NoRegretsCoyote said:


> Those days are long gone.
> 
> Banks are drowning in deposits now and are charged to park them overnight.
> 
> They only encourage saving for a mortgage because they'll get a borrower at the end of the process.


Fair point re deposits.

The "saving to purchase your principal primary residence" clause though?


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## NoRegretsCoyote (27 Nov 2020)

ATC110 said:


> The "saving to purchase your principal primary residence" clause though?


I agree it's not enforceable!


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## jim (27 Nov 2020)

Raisin.ie partner with european banks to offer irish customer decent rates in the current climate.

Eg 1 yr with portugese bank at circa 0.9%. Savage.


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## ATC110 (27 Nov 2020)

jim said:


> Raisin.ie partner with european banks to offer irish customer decent rates in the current climate.
> 
> Eg 1 yr with portugese bank at circa 0.9%. Savage.



In 2007 Anglo and INBS were offering c.7.5%. In 2020 we’re impressed with 0.9%


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## Up Rovers (27 Nov 2020)

ATC110 said:


> Is it advisable to consolidate savings and put them all in a state owned deposit facility?



As the old saying goes 'you should never put all your eggs in one basket'


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## Pmc365 (17 Dec 2020)

ATC110 said:


> In 2007 Anglo and INBS were offering c.7.5%. In 2020 we’re impressed with 0.9%


I dont recall any bank offering c. 7.5% then


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## Saavy99 (17 Dec 2020)

Pmc365 said:


> I dont recall any bank offering c. 7.5% then



I think Anglo were paying the  highest back then  at 5%.


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## Saavy99 (17 Dec 2020)

jim said:


> Raisin.ie partner with european banks to offer irish customer decent rates in the current climate.
> 
> Eg 1 yr with portugese bank at circa 0.9%. Savage.



It's alot better than sweet nothing from the Irish banks. I'm with Raisin, very good set up too.


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## vandriver (17 Dec 2020)

Saavy99 said:


> It's alot better than sweet nothing from the Irish banks. I'm with Raisin, very good set up too.


Do they offer a current account?


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## Saavy99 (17 Dec 2020)

vandriver said:


> Do they offer a current account?



I don't think so, I use them just for savings. www.raisin.ie


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## vandriver (17 Dec 2020)

Saavy99 said:


> I don't think so, I use them just for savings. www.raisin.ie


That joke just flew on by!


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## messyleo (17 Dec 2020)

vandriver said:


> That joke just flew on by!



Too subtle, you should have said currant account


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## fayf (24 Jan 2021)

State savings rates have been drastically reduced, effective January 24th

10 year bond,now paying 10% (was 16%)

5 year Saving Certs paying 3 % (was 5%)






						Ireland State Savings - State Savings Products | State Savings
					

State Savings products include Fixed Term Products, Regular Savings Products, Deposit Accounts and Prize Bonds




					www.statesavings.ie


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## Sarenco (24 Jan 2021)

Pretty savage cuts alright.

Mind you, the yield on 10-year Irish Government Bonds is currently negative (-0.19%) so retail investors are still getting a reasonable deal.

Also, inflation (CPI) is currently negative (-1.0%).


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## jpd (24 Jan 2021)

Not much anyone can do right now - too much savings in the world, not enough investments. Well, apart from governments throwing money at anything and everything that moves or, indeed, doesn't


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## RedDevil (24 Jan 2021)

0.59% on Savings Certificates where I have most of my money and no decent alternative investment regime


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## fayf (24 Jan 2021)

Its not an unexpected decrease, but it means one has to take some risk. Have a few 10 year state savings tranches, at rates between varying 50 % and 16%, but 10 %, is just too low, so have to look at something else for going forward.


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## MugsGame (24 Jan 2021)

Pmc365 said:


> I dont recall any bank offering c. 7.5% then



I do, perhaps it was on a regular saver account though.


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## MugsGame (24 Jan 2021)

Checked my Ombudsman complaint, Irish Nationwide had a regular saver paying 7.35% in 2008. Admittedly it was a building society not a bank, but I also recall getting high 1 year fixed rates from Anglo Irish and BOI around the same time.


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## ATC110 (24 Jan 2021)

Likew


MugsGame said:


> Checked my Ombudsman complaint, Irish Nationwide had a regular saver paying 7.35% in 2008. Admittedly it was a building society not a bank, but I also recall getting high 1 year fixed rates from Anglo Irish and BOI around the same time.


Likewise


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## MugsGame (24 Jan 2021)

Checked some of my Anglo records; I had a 6% 1 year rate with them in 2009 and an 8% regular saver in 2006.


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## NoRegretsCoyote (24 Jan 2021)

MugsGame said:


> I also recall getting high 1 year fixed rates from Anglo Irish and BOI around the same time.


 I was a heavy saver from 2008 onwards but from memory the best rates only ever started with a four.


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## ATC110 (24 Jan 2021)

MugsGame said:


> Checked some of my Anglo records; I had a 6% 1 year rate with them in 2009 and an 8% regular saver in 2006.


You keep records for a long time! I keep mine for the Revenue six year rule


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## MugsGame (24 Jan 2021)

NoRegretsCoyote said:


> I was a heavy saver from 2008 onwards but from memory the best rates only ever started with a four.



Sorry to hear your memory is failing you  

I have a leaflet from Irish Nationwide and statements from Anglo which confirm regular saver and fixed term rates in the 6-8% range I've quoted earlier. Rates will obviously have been lower for demand accounts.


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## NoRegretsCoyote (24 Jan 2021)

@MugsGame 

We're these new rates on offer in 2008 or were you taking advantage of existing products?

My own files are buried deep but I am pretty sure I had both a one-year term deposit with Anglo and a regular saver opened late 08 or very early 09. 

I think neither topped 5% but indeed memory could be faulty! Rates might've been different pre and post guarantee of course.


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## MugsGame (24 Jan 2021)

NoRegretsCoyote said:


> @MugsGame
> 
> We're these new rates on offer in 2008 or were you taking advantage of existing products?
> 
> ...



Most of my records are digital; I have dated scanned documents and/or emails to/from institutions which confirm the following *new account* openings:

Jan 2009 - 6% 1 year fixed with Anglo (may have been lucky with my timing, Anglo email advises rate for new a/cs was due to drop to 5.25% on 21st Jan)
Jun 2008 - 8% regular saver with Anglo
Apr 2008 - 7.35% regular saver with Irish Nationwide

Also the following aberration:
Apr 2011 - ~4.5% 2 year fixed rate deposit opened with BOI (3% paid at end of year 1 and 6% paid at end of year 2 if left for second year)

Their deposit rates being above their loan rates should really have been a sign to short these lenders ... I was such a rate tart, I've found paperwork from banks I'd forgotten existed, e.g. NIB.


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## NoRegretsCoyote (24 Jan 2021)

@MugsGame 

Memory is indeed fickle.

I dug out an email from Anglo from July 2009 referencing a 5.0% rate for regular saving.


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## cbreeze (25 Jan 2021)

MugsGame said:


> Checked some of my Anglo records; I had a 6% 1 year rate with them in 2009 and an 8% regular saver in 2006.


Back in the day you could keep maturing An Post savings with them for years after they matured - they paid the rate applicable at the time.  I had some back in the 80s and kept them until 2001 when they stopped holding them.


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## cbreeze (25 Jan 2021)

*'Grow your money with daily interest*
Maximise your money with as much as 0.65% interest when you stash cash in a Savings Vault. (Coming soon in Europe!)'

Something to look forward to from Revolut!  [From an email they sent on 16 January]


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## RedOnion (25 Jan 2021)

cbreeze said:


> *'Grow your money with daily interest*
> Maximise your money with as much as 0.65% interest when you stash cash in a Savings Vault. (Coming soon in Europe!)'
> 
> Something to look forward to from Revolut!  [From an email they sent on 16 January]


Don't get too excited. That's on USD funds.


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## Freelance (25 Jan 2021)

fayf said:


> State savings rates have been drastically reduced, effective January 24th
> 
> 10 year bond,now paying 10% (was 16%)



There is now a further disincentive in the case of the 10 year bond. Previously, the return in years 6, 7, 8 and 9 made early redemption in those years somewhat tolerable, always a consideration in longer term products and made this product an attractive option when compared with Savings Certs if there was any possibility of leaving the money for more than 5 years, even if the full 10 years was unlikely. The new interest rate structure backloads to a much greater extent with 50% of the interest payable in the final year. (previously this was 18.75%). The impact on the APR in the later years is significant. Definitely a consideration for anybody who has to factor the possibility of early redemption into their decision. 


Old cumul.Bonus - OldReturn - OldAPR OldNew cumul.Bonus - NewReturn - NewAPR NewEnd year 10.05%50100,0500.05%0.00%0100,0000.00%End year 20.25%250100,2500.12%0.00%0100,0000.00%End year 30.50%500100,5000.17%0.00%0100,0000.00%End year 41.00%1,000101,0000.25%0.25%250100,2500.06%End year 53.00%3,000103,0000.59%0.50%500100,5000.10%End year 65.00%5,000105,0000.82%0.70%700100,7000.12%End year 77.00%7,000107,0000.97%1.00%1,000101,0000.14%End year 810.00%10,000110,0001.20%3.00%3,000103,0000.37%End year 913.00%13,000113,0001.37%5.00%5,000105,0000.54%End year 1016.00%16,000116,0001.50%10.00%10,000110,0000.96%


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## Deckchair (25 Jan 2021)

Does that change in interest rates apply to existing and new products?


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## Freelance (25 Jan 2021)

Existing investments in the various Bond and Cert products are unchanged. Existing Prize Bonds however change immediately.


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