With a 12-month deposit account yielding 1%, depending on the bank, and inflation running at 7.7% as of March this year that’s a negative return or depreciation in depositors money of 6.7% using those figures.
There are hundreds of billions on deposit in Ireland with the Irish banks.
Therefore it’s a cheap source of funding for the banks and they don’t have a need to increase their rates in line with the European Central Bank rates because deposit money isn’t moving elsewhere.
It is clear that capital security is important to Irish savers and investors but also it’s important to have your money grow in real terms and preserve the long-term value of it.
So the solution is to look at a capital-secure bond to invest part of your money into.
You need to keep some of it aside for liquidity and some of it to access when required.
If you found this article helpful and would like to learn more about deposit returns, feel free to connect and start a conversation or contact me directly at +353 (87) 778 5325☎️