Why Banks May Not Always Be The Right Option For Your Money.

Should I Put My Savings On Deposit In The Bank?

In 2020 we in Ireland now have €16.4 billion in our personal savings. This is understandable after travel restrictions, business closures and lockdown. However for many, money was still coming into households and not being spent to the same degree as previous Summers. So what should people do with this cash which they have accumulated?

personal savings graph

It’s a simple mathematical equation, one that my 10-year-old – my 9-year-old and maybe even my 6-year-old can understand. It is the basic premise that with interest rates so low, you are guaranteed to lose money over the long term if you leave it in a deposit or current account.

Guaranteed.

You have miserable interest rates ;( negative rates are constantly touted by BOI amongst a few others). Any interest that does produce a surplus is taxed (D.I.R.T tax) and you have inflation just bubbling along nicely, chomping away at the relative value of your money in the account.

If you do not require access to this money for a term of 5 years or more - Do. Not. Leave. It. On .Deposit. In. The. Bank.


What Options Do I have Instead Of Putting Money On Deposit In The Bank?


Let’s look at just one. A multi-asset fund. This one happens to be with Zurich.

Whether you are investing a lump sum, setting up a regular investment, or both, multi-asset funds are useful. In a single fund, you can achieve the diversification, flexibility and balanced growth potential that most people need from their wealth.

For our new investors, we’re sticking with our 2018 and 2019 choice. Zurich’s Prisma 4 fund is a strong option for many new investors. It gives exposure to a broad range of assets, and is split as follows:- equites (57%), bonds (26%), alternative assets (11%), and property (6%).

Prisma 4 is also spread over the globe. 60% of the fund is invested in the US and Canada, 21% in Europe, 9% in Japan, and 10% in Asia-Pacific and South America.

And importantly, it has a track record of decent returns. In 2019, it grew over 18%, as Zurich’s fund managers played a smart game of switching in and out of equities and bonds during the year.

In the five years to 31 December 2019, this fund has returned more than 35% total growth as this chart shows.

In fact, Zurich Prisma 4’s performance is better than the comparable fund from its competitors, Aviva, Irish Life, New Ireland, and Standard Life over the last three and the last five years. Here’s a comparison:


Zurich Prisma 4’s performance

For contrast, your money in the bank has earned about 0.7% in interest during the same period.

With that in mind the opportunity to beat inflation and maximise your return on your savings must be worth considering.

Talk to me Nick Buckley QFA APA LIA. on Nick@citywidefinancial.ie or 0871228065 and we can discuss this, and other options to maximise your financial future.


Warning: Past performance is not a reliable guide to future performance.

Warning: Benefits may be affected by changes in currency exchange rates.

Warning: The value of your investment may go down as well as up.

Warning: If you invest in these funds you may lose some or all of the money you invest.

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