RTE article today - savings rates

Brendan Burgess said:
Deposit rates are not important to most people. The differences are not that material. If someone asked me about deposit rates, I wouldn't have thought of Raisin.

I would say to check askaboutmoney to see what rates were available. But I would seriously question whether having large sums on deposit and fixed for 5 years was a good idea.

For this particular article, the journalist seems to have checked Bonkers and spoken to a few people. Maybe they didn't talk about Raisin to him? In any event, it is certainly not a rehash of a press release.

Brendan
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I don't think anyone would claim that it would be a fantastic idea, all else equal, to put your money on deposit for 5 years.

But in certain situations, and absolutely in the context of deposit rates - Raisin rates currently represent a thoroughly decent option.

For example, if you have paid down your mortgage, fully max out pension bandwidth and have rainy day fund then it makes sense, to seek the best deposit rates out there.

100k on deposit in Irish Bank versus with raisin equates to a substantial difference. Why wouldn't you set up a Raisin a/c? Tis easy!
 
I would not have €100k in a rainy day fund.

And I would not have any large amount of cash in a deposit for long enough to make it worthwhile shopping around.

Brendan

Brendan
 
Brendan Burgess said:
And I would not have any large amount of cash in a deposit for long enough to make it worthwhile shopping around.
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Can you elaborate?

I've been looking at Raisin because there is some money I want to set aside for my son's college fund. I won't need this money for 10 years and Statesavings don't look at all attractive to me.
 
Páid said:
Can you elaborate?

I've been looking at Raisin because there is some money I want to set aside for my son's college fund. I won't need this money for 10 years and Statesavings don't look at all attractive to me.
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Covered many times in many threads.
If you want specific suggestions then do a Money Makeover post using the template in that forum.
 
Brendan Burgess said:
I would not have €100k in a rainy day fund.

And I would not have any large amount of cash in a deposit for long enough to make it worthwhile shopping around.

Brendan

Brendan
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Maybe YOU wouldn't, but thousands of others might want to. Nothing wrong with almost €17,000.00 for 5 years if you didn't need it.
I bet you the paper billionaire Sean Quinn would agree with me right now.
 
noproblem said:
Maybe YOU wouldn't, but thousands of others might want to. Nothing wrong with almost €17,000.00 for 5 years if you didn't need it.
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The €17k will lose significant value due to inflation over the five years. Keeping large amounts of cash on deposit or in deposit style products is generally not a good idea or an optimal investment strategy. As I said, this has been covered many many times in many many other threads.
noproblem said:
I bet you the paper billionaire Sean Quinn would agree with me right now.
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Total non sequitur.
 
ClubMan said:
The €17k will lose significant value due to inflation over the five years. Keeping large amounts of cash on deposit or in deposit style products is generally not a good idea or an optimal investment strategy. As I said, this has been covered many many times in many many other threads.

Total non sequitur.
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Don't want to get into a this and that scenario. We all know about inflation as of now, not a years time or whatever. Have you got a guaranteed better option? As for your Latin? Nonne mirabilis es? :)
 
noproblem said:
Have you got a guaranteed better option?
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Not guaranteed, no. But there are alternatives that will very likely provide better (than negative) returns over 5 years. The big issue here is that many people just assume/believe that cash savings/deposits are safe and no risk and that the nominal value of their money is the most important thing. This is flawed thinking that leads to suboptimal returns or, worse still, erosion of capital value. All investments involve some risk/reward. Cash deposits included.
 
Brendan Burgess said:
I would not have €100k in a rainy day fund.

And I would not have any large amount of cash in a deposit for long enough to make it worthwhile shopping around.

Brendan

Brendan
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I never said anything about having 100k in a rainy day fund.

I said after paying down mortg, maxing pension, establishing rain day fund and only after all of that - if you still have some money sitting on deposit (100k, 1 k whatevs trev) and for which you have no better use then my point is throw it at the best deposit rate you can get.
 
ClubMan said:
Not guaranteed, no. But there are alternatives that will very likely provide better (than negative) returns over 5 years.
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As a matter of curiosity, how would you quantify “very likely”?

Would you say there is a 90% probability that a well diversified stock portfolio will outperform a cash deposit, after all fees and taxes, over any given 5-year period based on historic returns? 80% probability? Something else?
 
Páid said:
I've been looking at Raisin because there is some money I want to set aside for my son's college fund. I won't need this money for 10 years and Statesavings don't look at all attractive to me.
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Hi Páid

That is why these discussions "Raisin is paying x%" are liable to lead to bad outcomes. You ask which bank is paying the highest deposit rate instead of the more fundamental question of "how should I fund my needs in 10 years' time?"

The answer to that is to overpay your mortgage instead of putting it on deposit. And if you have paid off your mortgage, you probably don't need to worry too much about funding your child's education. But if you are still worried long-term investments like that should be in equities or an equity-based product.

Brendan
 
Brendan Burgess said:
The answer to that is to overpay your mortgage instead of putting it on deposit
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For many individuals, putting some of their net wealth into a deposit account may make sense. They may already have paid off their mortgage, maxed their pension, have a sufficient rain day fund etc etc. They may be happy to put it away for 1 or even 3 years.

In this scenario the natural question for that individual is. Where is the best deposit accout? Raisin by a long way. The additional interest can be significant.
 
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NoRegretsCoyote said:
"What's the best risk-free bank deposit for an Irish resident?" is a fair question.
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And a pertinent point is that no deposit product is risk free. And that's not even considering the opportunity cost/risk of not putting the capital to work better elsewhere.

This is why individual money makeover analyses are so much better than "what is the best X product?" questions.
 
NoRegretsCoyote said:
<=€100k is indeed risk free per person per institution.
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Well, there is always a possibility (albeit very remote) that a national deposit guarantee scheme will be insufficient to meet all claims where an institution fails.

AFAIK national guarantee schemes only maintain reserves equivalent to 0.8% of covered deposits.

Perhaps it would be better to describe covered deposits as very low risk, as opposed to risk free.
 
Sarenco said:
Well, there is always a possibility (albeit very remote) that a national deposit guarantee scheme will be insufficient to meet all claims where an institution fails.

AFAIK national guarantee schemes only maintain reserves equivalent to 0.8% of covered deposits.

Perhaps it would be better to describe covered deposits as very low risk, as opposed to risk free.
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€100,000​

All savings products on Raisin.ie are protected up to an equivalent of €100,000 per depositor and bank according to EU laws.

€0​

Since the introduction of the EU-wide harmonized regulation on deposit guarantee schemes, savers have not suffered any losses within the protection limit of €100,000.

7 days​

By 2024, the time limit for repayment by deposit guarantee funds will be shortened to 7 working days. A number of Member States have already implemented this timeline.
 
Sarenco said:
Perhaps it would be better to describe covered deposits as very low risk, as opposed to risk free.
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The bank recovery and resolution framework is very advanced in Europe since the bailouts of 2008-09 and there are large deposit guarantee schemes at national and EU level. Banks also have to keep greater levels of liabilities that can be bailed in before retail depositors <€100k would be touched.

The risk is not precisely zero of course but approximates to it.
 
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