LouisCribben
Registered User
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People have been saving with An Post, and so lending to the State, for 50 years +.
It is very common.
Same happens in the UK, and many other countries.
Example: Savings Bonds = 3yrs, 10% net.
inflation isn't 5%
You can invest directly in Government Bonds if you so wish. The yields are more attractive than the solidarity bond or An Post Bonds. You do need a minimum amount though (I would guess 50k but could be higher). One of the big stockbroking firms will be able to help you.
Eddie Hobbs advises against the solidarity bond. Fear of inflation and the risk of national bankruptcy are his reasons. He has a point but then he was promoting the Cape Verde islands not that long ago.
The ECB has been fairly good at keeping eurozone inflation close to its target of 2%.
Irish inf did get out of hand, up to 7%, but now has turned negative.
Over the long run, the nominal int rate should exceed the inf rate, leaving a positive real int rate of maybe 2% on average.
10 year fix and tied in. Highly risky investment IMO.
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