Is anyone buying 10 year NTMA Nat. Solidarity Bonds?

With the decrease in State Savings and bank interest rates are any AAMers buying 3rd issue 10 year Solidarity Bonds which give a somewhat decent (in the current environment) interest rate of 2.79% AER Net. If PRSI becomes payable on this interest and if there are DIRT increases in forthcoming budgets this 2.79% figure will not reduce by very much as most of the return is composed of a tax free bonus at the end of ten years.

10 years is a long time to be thinking ahead and money placed in the 10 year Solidarity Bond really needs to be left there for the full 10 years otherwise returns are miserable.

I put some money in the 3rd issue this week and now have:
0.5% of my savings in the 1st issue
3% in the 2nd issue
11% in the 3rd issue

I have much higher percentages in the 12th issue savings bond and 17th issue savings cert which will be maturing from 2014-2018. So I have a wide range of maturity dates which I believe is called "laddering". In my case the ladder reaches a long way but there are some big gaps with no rungs in it!

It sounds as if you have all your eggs in one basket which is the Irish state.

I think you need to consider diversification rather than laddering.

I have been putting €1,000 into 10 Year NSB's since they started, I had hoped that the interest rate would have gone up rather than down.
Every few months I have Certificates maturing because I have invested in State Savings for a very long time.
90% of my savings are in State savings.
I do not think that the Euro will break up or that the State will crash
and if it does we are screwed anyway
I suppose I am very conservative in this respect and dislike the Banks,
and that there is a few others out there like me

Hello,

I have invested in the previous 10-year products but would be slow to invest in the current offering, simply because the return is far too low for the period of time in question.

In my personal view the time has come for me to invest more in in slightly more risky options ...

For a start, I'd be looking at the amount being invested in my pension (giving due consideration to the tax breaks, length of time until I expect to retire, investment strategy within my pension and current tax rules for extracting income on retirement).

Thereafter, a range of other investment classes are on my radar and while I'm not one for significant risks on a regular basis, there appears to be some merrit in considering investing in some of the larger quoted shares in both the ISEQ and on other markets abroad.

As for putting money on deposit with one of the Banks or a CU... eh, unless it's money I need "on demand" then there's no way on earth I'd go for it with the poor returns on offer.

RedDevil said:

.
90% of my savings are in State savings.
I do not think that the Euro will break up or that the State will crash
and if it does we are screwed anyway

Click to expand...

I don't think so either. But there is a risk and while you can protect against that risk, you should do so.

If the state and the banks collapse, we will all be in a bad way. But those who have deposits in Germany or shares with overseas earnings will be much better off.

For example, if you are a public servant or a pensioner, you are dependent on the solvency of the state and it would be crazy to increase this dependency when you can easily avoid it.

10 Year Bond:-

2% in the 2nd issue
5% in the 3rd issue

4 Year Bond:-

53% in the 1st issue

Savings Certificate:-

40% in the 17th issue

Thankfully most of my money went into state savings before 16 Dec 2012. I find the card so handy I'm sticking current savings into the 10 year bond product.

All my eggs in the one basket for sure. I might go with KBC or Nationwide in the future but if we go bust we go bust.