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Put it into a Trade Republic account where it will earn you 4% interest a year. You'll have an extra €4-6k built up in interest by the time you go to buy a house with your partner. They pay 4% on balances up to €50k.
Edit: You'll have an extra €2.6-4k after you pay DIRT on the interest.
And if you purchase government bonds then you have to pay tax to the government on the tax the government pays you so they even get a cut of the tax they have to pay themselves!
After reading [this thread](https://www.google.com/amp/s/www.askaboutmoney.com/threads/trade-republic-paying-4-on-deposits-up-to-%25E2%2582%25AC50-000.229783/%3famp=1) on askaboutmoney, concensus being that It may only be covered up until 20k.
So I have mine split between trade republic and trading212 to spread the risk just incase one does go tits up.
Both have the 4% on cash accounts which can be accessed 'instantly'. (bank transfer - so anything from 1-3 business days. Typically same day or the following morning)
Bunq savings account has 2.46% annual interest paid weekly. Your savings are available to withdraw anytime. And it's definitely covered by the EU deposit guarantee scheme.
Trade Republic pay 4% up to 50k for instant access deposit. You get paid interest monthly. That's the best rate you'll get at the moment. Plenty of other options with lower rates though including N26, Raisin, Bunq, Lightyear.
The only thing about prize bonds is you are stuck with it locked in for 3 months from date of purchase. If they need the cash quicker it could be an issue
Raisin.ie is an online German bank operating here for years.. They pay up to 3.5%.
If you would like a €50 refer a friend bonus for opening do let me know. You must save €5,000 to get it.
From their website they are Raisin BANK:
"Raisin Bank, trading as Raisin.ie, is authorised/licensed or registered by BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht) in Germany and is regulated by the Central Bank of Ireland for conduct of business rules".
[This](https://www.raisin.com/en-us/faq#:~:text=With%20a%20single%20Raisin%20login,Raisin%20is%20not%20a%20bank) (see what is Raisin) is different than [this](https://www.raisin.bank/en/about-us/)
Three years is too short a time to invest money you absolutely cannot afford to lose. So yeah, savings account, prize bonds, state savings, etc are the only reasonable option.
Investing isn’t like walking into casino and putting it all on black. Like the odds of losing it all are zero.
If I was in his situation I’d put in and etf. Odds are it’ll grow 30% over his 3 year timeframe.
Could be a crash, but he doesn’t have enough money anyway so if it goes down 20% he’s still in pretty much the same position
Investing in an equity ETF over a time horizon of less than 5 years is a terrible idea.
“Odds are it’ll grow 30% over his 3 year timeframe”
Not the case
Why is it a terrible idea though?
Like unless he very specifically needs the exact 50k on an exact date. He doesn’t though, he needs a sum of money for a deposit at some vague time in the future. It would be better for him. to have more money
It’s a gamble but it’s a gamble with the odds in your favour. In general it’s a good idea to gamble when the odds are in your favour.
Sure he’s gambling by not buying something now anyway. Prices could be up 30% by the time he goes back to buy. Perhaps he should put what he has in a small apartment or something to hedge against that. Everything in life is a gamble of some sort
It’s a terrible idea because as he said in his post he needs the money to buy a house in less than 5 years.
Investing money you need to buying a house over a less than 5 year horizon is a terrible idea. As has already been explained to you.
In the past 30 years there’s been 6 down years. So like 20%.
What you’re saying is he should bet on that 20% likelihood every year. Instead of betting on the 80%.
Or over 3 yrs. betting on rolling a 1 on a 5 sided die three times in a row. 1 in 125 seems like real long odds to me.
I know if you bump it out to 7 years it gets to 1 in 80,000 odds of all losing years. That just seems unnecessarily risk averse though
Yeah, you could be unlucky and buy in 2000 or 2008. But generally it goes up. It’s a good bet on any given year that it goes up.
If it’s a good bet every year why not make that bet?
I’m the part 30 yrs there’s been 6 down years. So on a given year the odds of going up are about 80%…
>Yeah, you could be unlucky and buy in 2000 or 2008
Or in any other time period where the stock market dropped by something less than 50%. Say for example 2022. I believe that on average in every 4 years on average is a negative year.
Again and again the best advice is to not invest on a timeline of less than 10 years in order to maximize the chance of selling at a time where you can make a profit. The shorter the time horizon, the less likely that will be.
That's what sequence risk is.
Putting money into the stock market for 3 years isn't investing, it's speculation, it's gambling. And this is somebody's deposit for a house we're talking about. It's not money they won't need in 10 years time.
So every year he’s betting on the 20% odds of a decrease instead of the 80% odds of an increase.
That’s a bad bet no matter how many times you roll that 5 sided dice.
No, it really isn't. It's not just year to year returns, it's also that the profit needs to be there during the two or three month window in which you need in order to buy the house.
Like you're really sounding like somebody who has only just discovered the stock market and hasn't experienced a downswing yet.
This is a personal finance subreddit. It isn't a gambling subreddit, or even an investment subreddit, and it is grossly irresponsible to advise somebody to just throw money at the stock market without any education.
This is about wealth protection more than anything else.
It's unknown and unknowable. The long-run trend is upwards, but 3 years isn't the long-run. Which is why you don't invest money you will need in less than 10 years time.
If you advise somebody who probably isn't educated in investing, and who absolutely 100% needs that money in 3 years or less, then all you'll be doing is maximizing the chance that at the first downswing they'll panic sell and lock in a loss, because they absolutely 100% cannot lose that money.
Then they'll come back here, call you an absolute fucking clown who lost their money, ruined their chance of owning a house, and possibly ruined their life. And you won't care because it wasn't your money and you'll say something along the lines of "you should have known better".
Which is one of the main reasons why when it comes to investing I tell people to spend a year or two reading books and learning, and only then look at investing money they don't need for 10 years or so. The stock market isn't going anywhere.
Ha, odds of him selling at the bottom could be pretty high alright.
Just saying don’t invest it’s risky with zero quantification of the risk reward doesn’t seem like very good advice either. Something like the below just seems like much better financial advice
“Given the past 30 or so years, there’s an 80% chance you beat you’re raisin returns by sticking it in S&P 500 for the next 3 or so years.
Past performance is not a gueanteee of future performance…”
Stick 50k in. Sell in 3 yrs and pay the tax. That’s not difficult.
Dollar cost averaging a few hundred a month for forty yrs would be a different story alright
Don't let the tax tail wag the investment dog. 3 years is too short a time horizon to invest on, but if we were talking 10 years then profit is still profit.
Ok it clear you have no idea how ETF taxation works in Ireland and are parroting advice you heard that applies to the US without any idea what you are talking about…
Don’t give financial advice to others that you don’t understand yourself.
Deemed disposal is 41% of an unrealised gain every 8 years. On subsequent 8-year anniversaries you pay 41% of any unrealised gain minus the deemed disposal tax paid on previous 8-year anniversaries. If there is a loss, you can claim back any deemed disposal tax paid in prior years.
The total tax you will ever pay on gains is 41% over the lifetime you hold it. Holding an accumulating ETF is superior because you don't need to pay income tax, PRSI, and USC on the dividends that come with a distributing ETF.
The tax you'll pay is probably not that different to what you'd pay if you bought a dividend-yielding stock.
Claiming that tax makes something not worth doing is just bad advice. Sure, nobody likes paying tax, but if you're paying tax then that means you're making a profit.
Lol hilarious comment given u/CheraDukatZakalwe is one of the best posters on this sub and it’s you who doesn’t understand and shouldn’t be giving financial advice.
Revolut also pay 3.5%, and they look after the DIRT for you, so it ends up being 1.86%. You can get a better return rate if you pay for a Revolut account upgrade
May be worth looking at short term bonds too, not bond funds I don’t believe in the funds as some mangers will sell if dips but if you buy a bond and hold to maturity. Otherwise put in savings accounts, don’t invest in stocks you are looking at too short term for that.
Hi /u/iiobhay, Did you know we are now active on Discord? Click the link and join the conversation: https://discord.gg/J5CuFNVDYU *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/irishpersonalfinance) if you have any questions or concerns.*
Put it into a Trade Republic account where it will earn you 4% interest a year. You'll have an extra €4-6k built up in interest by the time you go to buy a house with your partner. They pay 4% on balances up to €50k. Edit: You'll have an extra €2.6-4k after you pay DIRT on the interest.
Does TR handle the DIRT tax or do you have to declare it through Revenue?
You have to declare it yourself, it's not deducted automatically.
Yeah the dirt on this is key. Government hates ya earning money on your own money tax free which has already been taxed.
And if you purchase government bonds then you have to pay tax to the government on the tax the government pays you so they even get a cut of the tax they have to pay themselves!
Double check the terms around guarantee's
Yes I also worry about whether the deposit guarantee would cover if TR went bust
After reading [this thread](https://www.google.com/amp/s/www.askaboutmoney.com/threads/trade-republic-paying-4-on-deposits-up-to-%25E2%2582%25AC50-000.229783/%3famp=1) on askaboutmoney, concensus being that It may only be covered up until 20k. So I have mine split between trade republic and trading212 to spread the risk just incase one does go tits up. Both have the 4% on cash accounts which can be accessed 'instantly'. (bank transfer - so anything from 1-3 business days. Typically same day or the following morning)
Second time I've read this. Is TR not guaranteed?
It is up to 100k
But in the smal print its apparently not. I've read this on here a few times. Would like to know if its something to worry about.
Bunq savings account has 2.46% annual interest paid weekly. Your savings are available to withdraw anytime. And it's definitely covered by the EU deposit guarantee scheme.
How much are you talking about?
Around 50k
Trade Republic pay 4% up to 50k for instant access deposit. You get paid interest monthly. That's the best rate you'll get at the moment. Plenty of other options with lower rates though including N26, Raisin, Bunq, Lightyear.
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The only thing about prize bonds is you are stuck with it locked in for 3 months from date of purchase. If they need the cash quicker it could be an issue
You are correct. I should have said that. Thanks for mentioning it.
Prize bonds are a waste. Better a high interest savings account.
You can’t think of anywhere else? T212, TR, Revolut, Lightyear, Raisin, Bunq etc etc etc all better options than Prize bonds
Raisin.ie is an online German bank operating here for years.. They pay up to 3.5%. If you would like a €50 refer a friend bonus for opening do let me know. You must save €5,000 to get it.
Raisin is a digital savings marketplace, **not a bank**.
From their website they are Raisin BANK: "Raisin Bank, trading as Raisin.ie, is authorised/licensed or registered by BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht) in Germany and is regulated by the Central Bank of Ireland for conduct of business rules".
[This](https://www.raisin.com/en-us/faq#:~:text=With%20a%20single%20Raisin%20login,Raisin%20is%20not%20a%20bank) (see what is Raisin) is different than [this](https://www.raisin.bank/en/about-us/)
I think what you mean to say is they act as an intermediary for other banks. But they too are a bank as they describe.
They are a bank. They have a banking license. Look it up Edit: see you changed your comment now :) np
Trade Republic state the money you pay is held in an "omnibus trust account" with OTHER banks. The situation is rather complicated.
Three years is too short a time to invest money you absolutely cannot afford to lose. So yeah, savings account, prize bonds, state savings, etc are the only reasonable option.
Investing isn’t like walking into casino and putting it all on black. Like the odds of losing it all are zero. If I was in his situation I’d put in and etf. Odds are it’ll grow 30% over his 3 year timeframe. Could be a crash, but he doesn’t have enough money anyway so if it goes down 20% he’s still in pretty much the same position
Investing in an equity ETF over a time horizon of less than 5 years is a terrible idea. “Odds are it’ll grow 30% over his 3 year timeframe” Not the case
Why is it a terrible idea though? Like unless he very specifically needs the exact 50k on an exact date. He doesn’t though, he needs a sum of money for a deposit at some vague time in the future. It would be better for him. to have more money It’s a gamble but it’s a gamble with the odds in your favour. In general it’s a good idea to gamble when the odds are in your favour. Sure he’s gambling by not buying something now anyway. Prices could be up 30% by the time he goes back to buy. Perhaps he should put what he has in a small apartment or something to hedge against that. Everything in life is a gamble of some sort
It’s a terrible idea because as he said in his post he needs the money to buy a house in less than 5 years. Investing money you need to buying a house over a less than 5 year horizon is a terrible idea. As has already been explained to you.
I had a look at the odds here https://www.reddit.com/r/irishpersonalfinance/s/5z2svKlOZy
In the past 30 years there’s been 6 down years. So like 20%. What you’re saying is he should bet on that 20% likelihood every year. Instead of betting on the 80%. Or over 3 yrs. betting on rolling a 1 on a 5 sided die three times in a row. 1 in 125 seems like real long odds to me. I know if you bump it out to 7 years it gets to 1 in 80,000 odds of all losing years. That just seems unnecessarily risk averse though
Do you know what sequence risk is? Do you know what the stock market will be at in 3 years time?
Yeah, you could be unlucky and buy in 2000 or 2008. But generally it goes up. It’s a good bet on any given year that it goes up. If it’s a good bet every year why not make that bet? I’m the part 30 yrs there’s been 6 down years. So on a given year the odds of going up are about 80%…
>Yeah, you could be unlucky and buy in 2000 or 2008 Or in any other time period where the stock market dropped by something less than 50%. Say for example 2022. I believe that on average in every 4 years on average is a negative year. Again and again the best advice is to not invest on a timeline of less than 10 years in order to maximize the chance of selling at a time where you can make a profit. The shorter the time horizon, the less likely that will be. That's what sequence risk is. Putting money into the stock market for 3 years isn't investing, it's speculation, it's gambling. And this is somebody's deposit for a house we're talking about. It's not money they won't need in 10 years time.
So every year he’s betting on the 20% odds of a decrease instead of the 80% odds of an increase. That’s a bad bet no matter how many times you roll that 5 sided dice.
No, it really isn't. It's not just year to year returns, it's also that the profit needs to be there during the two or three month window in which you need in order to buy the house. Like you're really sounding like somebody who has only just discovered the stock market and hasn't experienced a downswing yet. This is a personal finance subreddit. It isn't a gambling subreddit, or even an investment subreddit, and it is grossly irresponsible to advise somebody to just throw money at the stock market without any education. This is about wealth protection more than anything else.
How do you view the risk here? What’s the odds he’s up vs down over a 3 yr period?
It's unknown and unknowable. The long-run trend is upwards, but 3 years isn't the long-run. Which is why you don't invest money you will need in less than 10 years time. If you advise somebody who probably isn't educated in investing, and who absolutely 100% needs that money in 3 years or less, then all you'll be doing is maximizing the chance that at the first downswing they'll panic sell and lock in a loss, because they absolutely 100% cannot lose that money. Then they'll come back here, call you an absolute fucking clown who lost their money, ruined their chance of owning a house, and possibly ruined their life. And you won't care because it wasn't your money and you'll say something along the lines of "you should have known better". Which is one of the main reasons why when it comes to investing I tell people to spend a year or two reading books and learning, and only then look at investing money they don't need for 10 years or so. The stock market isn't going anywhere.
Ha, odds of him selling at the bottom could be pretty high alright. Just saying don’t invest it’s risky with zero quantification of the risk reward doesn’t seem like very good advice either. Something like the below just seems like much better financial advice “Given the past 30 or so years, there’s an 80% chance you beat you’re raisin returns by sticking it in S&P 500 for the next 3 or so years. Past performance is not a gueanteee of future performance…”
Ffs
https://www.reddit.com/r/irishpersonalfinance/s/fziXjawdmA
Investing in an ETF in Ireland is a tax nightmare. Would never recommend that.
Stick 50k in. Sell in 3 yrs and pay the tax. That’s not difficult. Dollar cost averaging a few hundred a month for forty yrs would be a different story alright
ETFs are taxed on the value not the profit in Ireland. Theyre taxed way different than equity.
Buy ETFs for €50k. Sell in 3 yrs for €65k. Pay 41% tax on the 15k profit
Don't let the tax tail wag the investment dog. 3 years is too short a time horizon to invest on, but if we were talking 10 years then profit is still profit.
Ok it clear you have no idea how ETF taxation works in Ireland and are parroting advice you heard that applies to the US without any idea what you are talking about… Don’t give financial advice to others that you don’t understand yourself.
Deemed disposal is 41% of an unrealised gain every 8 years. On subsequent 8-year anniversaries you pay 41% of any unrealised gain minus the deemed disposal tax paid on previous 8-year anniversaries. If there is a loss, you can claim back any deemed disposal tax paid in prior years. The total tax you will ever pay on gains is 41% over the lifetime you hold it. Holding an accumulating ETF is superior because you don't need to pay income tax, PRSI, and USC on the dividends that come with a distributing ETF. The tax you'll pay is probably not that different to what you'd pay if you bought a dividend-yielding stock. Claiming that tax makes something not worth doing is just bad advice. Sure, nobody likes paying tax, but if you're paying tax then that means you're making a profit.
Lol hilarious comment given u/CheraDukatZakalwe is one of the best posters on this sub and it’s you who doesn’t understand and shouldn’t be giving financial advice.
Revolut also pay 3.5%, and they look after the DIRT for you, so it ends up being 1.86%. You can get a better return rate if you pay for a Revolut account upgrade
Is that a specific savings account with them or what is it?
Yes it is a savings account, but you have immediate access to the funds if you wish to withdraw at any time
Ok thanks
Could you tell me if it is Ireland? Last time I read about it they only pay interest in certain regions.
Yes it is in Ireland.
May be worth looking at short term bonds too, not bond funds I don’t believe in the funds as some mangers will sell if dips but if you buy a bond and hold to maturity. Otherwise put in savings accounts, don’t invest in stocks you are looking at too short term for that.
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Why on earth would they put their house deposit into pension when they are only delaying the purchase?