Excess cash? Save it, spend it or pay off debt?

Ireland is a nation of savers. Collectively, we have around €100 billion sitting in deposit accounts in banks and other financial institutions.

It's squeezing a key measure of their profitability known as the Net Interest Margin . This is the difference between the cost of funding and the price charged for lending. Regular depositors, like every one of us, are among their lenders and the return they are now offering us for that facility is negligible and it's getting less and less generous.

Some argue that deposits are already costing the consumer as the rates on offer are being outstripped by the rate of inflation. Consumer prices are rising at an annualised rate of around 1.3% across the economy at the moment. If you're getting less than a quarter of one percent for that money on deposit, it's effectively costing you to leave it in the bank.

"At the moment the best option for a regular saver is KBC's Regular Saver Account, for which you also need to have a KBC Extra Current Account," Daragh Cassidy, Head of Communications with the comparison website, bonkers.ie says. A five year savings certificate offers a 5% return over that period, which works out at about 1% a year, or €10 per year, on every €1,000."However, once you take inflation into account your real, or inflation adjusted return will be almost nothing. For example the 10-year National Solidarity Bond is offering 1.5% AER right now. But inflation is currently 1.3%. Do the math!"

Compound interest is the accumulation of money as a result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest.

I pay my spare cash to my landlord

How is this even a thought. Clearly you pay down debt.

So, in other words, stuff your mattress.

Who has any?

Buy face masks and hand sanitizer?

Ireland Latest News, Ireland Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Irirsh coronavirus patient is a woman who travelled with another passengerIt's understood she travelled from Northern Italy via Dublin Airport to Belfast with another passenger, but it's not known if the other person is an adult or a child.
Source: IrishMirror - 🏆 4. / 98 Read more »

Teen, 15, allegedly sexually assaulted and filmed by men in Dublin hotelIt's alleged the assault was recorded on a mobile phone
Source: IrishMirror - 🏆 4. / 98 Read more »