In order to get on top of your finances you need to truly understand what your situation is. In order to make financial goals you need to assess your current or future priorities, whether it be child care, college tuition or pension funds. In order to do this you could contact your current advisor or broker or acquire one. You can formulate fresh plans with achievable goals.
Since the government has made plans to implement a punishing 41pc tax on interest income and it is rare to hear of a good interest rate from a bank, what can we do?
Where you do your banking these days is almost as important as ‘who’ with. Online banking applies to both lump sum and saver accounts but not all consumers are comfortable with banking online. However for those who are willing RaboDirect.ie offers many good deals and can do simply because it’s an online bank with few overheads. Following their lead both AIB and PTSB have online exclusive deals.
As with most things, banking consumers must shop around. If making a lump sum deposit or regular deposit you would want to be sure you’re in safe hands. The main strain with this type of banking is holding onto any interest made after DIRT takes its toll. The top three banks would be Nationwide UK (IRL) offering 4pc before DIRT, KBC offers 3.5pc before DIRT and PTSB offers 2.5pc before DIRT.
Again with a lump sum deposit the banks with the good deals only offer them online.
The State-saving schemes offered through An Post are not too appealing either. Although they are DIRT free the Annual Equivalent Rate (AER) is a measly 0.99pc/4pc gross. Or the three-year Savings Bond offers 0.83pc AER/2.5pc gross.
If you are a first time buyer trying to get onto the property ladder and saving for a deposit the recent budget worked in your favour. Savings for first home deposits are DIRT free.
If you have an income that qualifies you for an approved pension plan you can grow your fund tax free and some of your income can enter the plan tax free. The only snag are the fees and chargers involved that must be paid to pension providers. However as with most things these days the terms are negotiable in order to increase business.
© Copyright 2016. Anthony Joyce is authorised by the Insolvency Service of Ireland to carry on practice as a personal insolvency practitioner.