In a week where AIB announces profits in excess of €2 billion and reports indicate Irish deposits have more than €150 billion held in cash, much of it in low yielding instant access accounts, we release the second article in our series on what options there are for Irish savers to protect the real value of their savings.
A recent ruling by the Tax Appeals Commission reinforces the importance of planning correctly when passing wealth to the next generation. As a result of the Tax Appeals Commissioners ruling , the 32 year old ‘child’ had to pay €65,835 in taxes to Revenue.
In 2022, global Central Banks began to increase interest rates to combat high inflation after an extended period of low or even negative interest rates. Low Central Bank interest rates meant that depositors and bond investors could earn little to no return from capital protected, low-risk investments.
In the last 12-18 months, interest rates in Europe have increased substantially. The current European Central Bank deposit rate is 4.00%, which is the rate banks can use for overnight deposits in the Euro system. Unfortunately, this increase has not been passed on to customers of the main Irish deposit providers including AIB, Bank of Ireland, PTSB and State Savings (An Post). With inflation in Ireland standing at 4.6% in December 2023, this is a significant issue for people with savings in bank deposits. |