Redundancy lump sum investment

Hi,

My wife is being laid off today and is getting a redundancy payment of approx €50,000. As we have a young family she intends to stay at home for the next 3 years so we want to use the lump sum to provide her with a weekly/monthly "wage". My question is simply - should l put the lump sum in a deposit A/C and let it drip feed into her account on a weekly/monthly basis, or should l carve it into 3 amounts and invest them in 1 year and 2 year fixed term accounts? Any suggestions will be greatly appreciated.

If you, for example, put it into a 3% savings account your interest after DIRT is only going to be 1125 per year, about 93 per month. Just in case you got the impression you can get a decent income from 50k.

nacaym said:

My wife is being laid off today and is getting a redundancy payment of approx €50,000. As we have a young family she intends to stay at home for the next 3 years so we want to use the lump sum to provide her with a weekly/monthly "wage". My question is simply - should l put the lump sum in a deposit A/C and let it drip feed into her account on a weekly/monthly basis, or should l carve it into 3 amounts and invest them in 1 year and 2 year fixed term accounts? Any suggestions will be greatly appreciated.

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Hi Nacaym,

There is very little difference between 6 months, 1 year and 2 year term deposit rates and the best rates for on demand, as per the below. Hence, there is currently very little incentive to lock.

I suggest you put the 40,000 EUR on deposit with Nationwide UK at 3.55%, with monthly bank interest set to feed directly into your current account. Nationwide UK offer this feature.

I suggest you put 10,000 EUR on deposit with Halifax at 3.75%.

I suggest you set up a standing order from your Halifax account to your current account with your monthly requirements. In turn, I suggest you feed your Halifax account from your Nationwide UK account. Note interest is reduced with Nationwide UK if you make more than 6 withdrawals are made a year

Best Buys - Highest Term Deposit Rates

6 Months - Investec - 3.25%
1 Year - Anglo Irish Bank - 3.80%
2 Years - Bank of Ireland - 3.44%

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1. Best Lump Sum Personal Deposits

Best for amounts from €10,000 to €2 million
Nationwide UK: Easy Access (Discuss)
3.55% on €2,000 minimum to €2m maximum.
NB: Interest is reduced if more than 6 withdrawals are made a year (Apr-Mar).

Best for smaller amounts under €10,000
Halifax: Flexi Saver (Discuss)
3.75% (from Jan 2009) on up to €10,000 (bonus interest for first year only)
2.00% on €10,000 to €250,000 maximum. Halifax say "rest of balance" verbally, but the terms contradict this.
Interest paid quarterly.
Note: After year one you can choose to close the account and re-open a new Flexi Saver Account.

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When your wife is made redundant, wouldn't she be entitled to Jobseekers benefit for 12 (or is it 9) months ?

Hi all,

Thanks for the suggestions. Unfortunately she will not be entitled to Jobseekers Benefit as she won't be "available for and genuinely seeking work" (in the parlance of the Dept. of Social Welfare) as she intends minding the kids until they are all going to school so will be out of the job market for a few years. Hopefully things will have picked a bit up by then!

Regards,
Nacaym.

If your wife isn't entitled to Jobseekers Benefit, she should be entitled to a Home Careers Tax Credit, this is €900 for 2008.