i have certain amount of money in the AIB bank but i am only getting 1.025% interest every year. i would like to put the money i have in government bonds for two years.there i would get higher interest then i would in the bank
Does anyone know where you can purchase these bonds or find out more information about them.
i was looking on Irish Stock Exchange Website about bonds and coundn`t find out on the site when the bonds started.
Do you have to buy bonds on a certain date or can you just buy them at any time
You do know that you can get 2.6% gross CAR on certain demand deposit accounts or 2.74% CAR tax free over five and a half years on An Post savings certs?
1% is NOT a low charge on instruments earning less than 3%. Charges as low as 0.1% are available from some banks - some might even pay more than wholesale rates just to have your money - shop around.
Bongo, What Bank is offering unit linked bond fund for 0.1%? None!! Back this % up with examples.
1% is not as low as it should be but reality is it is low in Irish terms. This is in the context of 5% bid/offer spreads and 1.5-2% pa mgmt charges.
If you are taking about 0.1%, wholesale rates, in the context of Brokers commissions then you really are taking about large investments. ALL brokers have minimum transaction charges.
Medium Term Bonds (7yrs) are grossing 4-5% pa by the way.
I'm confused. Bongo - is your point simply that bonds need to be examined carefully to evaluate if the risk/volatility and charges involved make them worth considering over a deposit account? I don't understand your seeming implication that banks might CHARGE 0.1% to operate a deposit account and then pay out c. 2.5% in interest? On the topic of interest rates it's worth checking the best buys (note 2.6% gross CAR on NR's online demand deposit account):
Ms Blank, I was simply stating the bleeding obvious that banks are typically charging 0.1% or even subsidising the wholesale money rates in their hunger for retail deposits.
A Government Bond is nothing more than a wholesale fixed term deposit with the Government - to have 1% per annum deducted from this leaves any unit linked alternative to bank fixed term deposits hopelessly uncompetitive.
> Blank, I was simply stating the bleeding obvious that banks are typically charging 0.1% or even subsidising the wholesale money rates in their hunger for retail deposits.
If it was so obvious I would not have asked for clarification. I'm still not clear on what you point is on the 0.1% issue but maybe you can address it when you're less irritable... :rolleyes
4 year Government Bond - paying 3.5% p.a.
Unit Linked fund with 1% FMC invested in same Bond - pays 2.5% p.a.
4 year interbank rate - 3.5%
Rational bank looks for 0.1% margin, pays 3.4% p.a. on 4 year deposit
Hungry bank subsidizes retail depositor - pays 3.7% maybe
More invective than light - bonds do offer a very good diversification argument, and if rates stop going higher (which is possible given that it appears we've had the strong growth globally for the year already in major economies) they could still make substantial capital gains.
Found interesting info on BIAM's site - Bond Book in their Ireland section www.biam.ie - which could provide some basic grounding...Also good FAQ section on globeinvestor.com.
Possibly easiest way to buy bonds is through your online account and using iShares (see TLT quote - long-term US bonds - on finance.yahoo.com)