# €200K in savings - how to spread risk?



## eliza (28 Mar 2010)

We have been fortunate to have had two reasonably well paying jobs in the last ten years and have managed to save approx €20K per year. We now have €200K in savings and a mortgage of €120K. As we are on a ECB+0.5% tracker, we don't see any advantage to paying off our mortgage early.

The outlook for the coming ten years is not so good. I anticipate that for the next ten years we will live within our income but not save. We have one public sector job and one tenuous private sector job and we both have had paycuts etc in the last year. However, even if we do go down to just one income, we should still be able to live on what we earn as our child care bill will also be reduced.

Where should we invest/deposit €200K? I was considering the following would be a good low-risk bet by speading the amount between the following:

50K at 3.3% in Nationwide UK  instant access (UK Guarantee)
75K at 4.7%(effect) in An Post 5.5 year certs (3.53%) (Irish Guarantee)
75K at 4.08% in Rabodirect 10 Year Fixed Term Deposit Account (AAA rating bank with Dutch Guarantee)


Is there a better strategy?


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## legal33 (28 Mar 2010)

I would put €120K in An Post 5.5 year certs


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## Lightning (28 Mar 2010)

You said "you will be living within your means" and then you suggest you want to put money in a 10 year term deposit. If there is any possibility that you will need your money inside the next 10 years then do not lock for such a long period. 

See note 3 below. 



> *[broken link removed]*
> 10 Years *4.05%*
> Note 1: €500 minimum
> Note 2: Monthly, quarterly and semi annual interest payment options subject to lower rates.
> Note 3: 10 year term deposits are not suitable for most savers. You should only consider this product if you are certain that you will not need access to your money at any stage over the next 10 years. You should also be aware that you take on considerable upward interest rate risk by fixing for 10 years.


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## eliza (28 Mar 2010)

fungus, legal 33,

Thank you for your replies.

I would be a little nervous about putting so high a percentage of our savings in An Post in case Ireland defaults. I would like to make sure I spread the risk especially in a worse-case scenario but still receive a reasonable interest rate.. 

I can certainly see your point about locking €75K away for 10 years. Instead of €75K way in Rabo, I may put €25K way in Rabo and put 50K into an NIB (Danske) e-saver account at 3%. 

Eliza


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## Fuzzy (29 Mar 2010)

An Post is state-guaranteed


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## crabbybear (29 Mar 2010)

Fuzzy said:


> An Post is state-guaranteed


 
How guaranteed is the state?


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## eliza (29 Mar 2010)

crabbybear said:


> How guaranteed is the state?



Exactly my concern. Am I overly cautious by ensuring that I spread the risk across 3/4 EU states.


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## RMCF (29 Mar 2010)

Is the guarantee scheme not coming to an end soon?

Surely this is going to have big repercusions for all savings/deposits?


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## txirimiri (29 Mar 2010)

RMCF said:


> Is the guarantee scheme not coming to an end soon?
> 
> Surely this is going to have big repercusions for all savings/deposits?


 
My understanding is that it is the unlimited guarantee scheme that is coming to an end this September. Deposit accounts of 100k and under will still be guaranteed


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## RMCF (29 Mar 2010)

So the really big money is about to exit the country?


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## ft5j60j (2 Apr 2010)

are you allowed to lodge your money in foreign counties? Ie SPain/ Uk or where ever?
Im also in the position that I have about 250k to invest and dont feel safe putting it in the Irish banking system ..


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## jpd (2 Apr 2010)

I would have to say that a lot of the EU countries are in almost as bad a state as Ireland - but this doesn't make the headline news in Ireland.


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