Buying Savings Bonds In Smaller Amounts

F

freddyornot

Registered User
Messages
17
Hi There,

Picking up on a comment within a previous thread, are you better off buying say 10x €10,000 savings bonds rather than 1x€100,000 bond. The main reason been if I wanted just 10k a year or two down the road, I wouldn't need to cash in the full €100,000. Is there any drawbacks buying the bonds this way.

Thanks
 
Interested in this point myself. so far i gather that you lose the current year interest if you encash so its better to wait until the full years interest has been added before you withdraw.
 
I am still not 100% clear on what happens when the interest on SS products beings you over the maximum holding. If you go over max holding on the first or subsequent reinvestments, it could be better to have 1 bond rather than 10? I don't know however.

The only other downside that I can see is extra paperwork and if you are buying by bank draft, the cost of 10 drafts intead of 1. I normally pay around 2.50 for a draft.

If you are reinvesting you will have 10 forms to fill in and send off but it's all done using freepost envelopes so no additional cost there.
 
Re: the max holding here is the rule

8. Maximum Holding
(1) No person shall at any time hold or have any interest in Savings Certificates
with an aggregate purchase price of more than \120,000 (the “maximum
personal holding”).

(2) In the case of a joint holding of Savings Certificates by two or more persons,
such holding may include Savings Certificates of an aggregate purchase
price of not more than \240,000 provided always that each holder shall not
thereby exceed the maximum personal holding.

(3) Inherited Savings Certificates shall not be taken into account for the purposes
of this Rule except where the person holding such Savings Certificates
purchases or seeks to purchase further Savings Certificates after the date of
the inheritance

4) If the holder of specified securities purchases a Savings Certificate in an
amount equal to or less than the amount repayable in respect of such specified
securities and the purchase is made with effect from the date of the expiry of the
period for which the specified securities in question may be held as prescribed by
the National Treasury Management Agency (the “expiry date”), the Savings
Certificate so purchased shall not be taken into account for the purposes of this
Rule except where the person holding such Savings Certificates purchases or
seeks to purchase further Savings Certificates after the expiry date.
 

Any thoughts on the OPs question?


For the 4 and 10 year it is dealt with at point 18 and 19 for partial encashment
http://www.statesavings.ie/Downloads/NSBFAQs.pdf

For the 3 year :

The amount due on repayment for each
€100 of Savings Bonds shall be as follows:
After 1 year ​
​

€102.20 (2.2%)
After 2 years ​
​

€105.20 (5.2%)
After 3 years ​
​

€110.00 (10.0%)
The period of deposit referred to above commences on the date of purchase of the
Savings Bonds. Where repayment takes place before the first anniversary date, no
interest will be paid. Where repayment takes place after the first anniversary date,
interest will be calculated for each complete calendar month at the appropriate
Post Office Savings Bank deposit rate on the total value of the investment at the
last anniversary date. For the purpose of this calculation, no interest will be paid in
respect of the month in which the repayment takes place. Post Office Savings Bank
deposit rates are likely to be lower than the Savings Bonds average annual rate of
interest and so the average annual rate of return will be lower if a repayment is​
made otherwise than on anniversary dates.
http://www.statesavings.ie/Downloads/SavingsBondsProspectus.pdf

However it does not seem to make provision for partial encashment,

So following the OPs point would you be better breaking your investing into say one large 70% of investment and two 15% and then be able to cash a 15% in the event of unforseen emergency?
​
 
I want to know how and where to ask a question on the best return with the Ireland State Savings (NTMA) on a lump sum. Step by step if possble, help appreciated. The three I have in mind are 1. National Solidarity Bond (4 years), 2. Savings Certificates (5.5 years), 3. Savings Bonds (3 years)
 
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