Deposits – A safe bet or are you losing already?

“I don’t want to take any risk with my money, I would rather leave it on deposit where it is safe.”

With deposits at an all time low, is it time to start exploring other options for your investments? Many people think that by leaving capital on deposit, your capital is in a risk free product. In reality, you are actually subject to inflation risk. The inflation rate from 2019 to 2020 is 1.5%. The highest rate of interest being paid currently on a fixed rate deposit account is 0.1% A.E.R. gross, of course deposit interest retention tax (DIRT) is deducted from this, giving you a net gain of 0.067% on your capital if you are subject to DIRT. In terms of money, that is 67 cent for every €1,000 you invest. When you factor in inflation, your €1,000 last year would need to be €1,015 for the same purchasing power in 2020. You are actually losing money in terms of real value by putting money on deposit.

Of course, there is a purpose for deposits. You do need some capital on deposit for emergencies and for short term savings. However, if you are saving long term, say more than 5 years, and you have enough money on deposit to cover emergencies, there can be huge benefits to investing in a risk bearing product.

The type of product in which to invest depends on a number of different factors, age, overall assets/liabilities, risk appetite(complete our risk assessment questionnaire) etc. You have nothing to lose by discussing your options.

Contact us for a chance to start planning your financial future. We will use our experience and expertise to guide you in the right direction and find the most suitable product to meet your financial needs and goals.

Photo by Michael Longmire on Unsplash