Money Guide Ireland

Some people seem to get confused about how interest on deposit accounts is calculated and paid. Some people seem to think that an account that pays interest annually – say on 31st Dec – will pay a full years interest on the balance as at 31st Dec. I have seen forums where people think that putting a big deposit into an account in December will give them a massive increase in the interest paid. I have also seen people looking for an account that pays interest monthly because they will be withdrawing money from the account during the year and don’t want to have the interest calculated on the balance at the end of the year.
Interest on a deposit account is almost always calculated on a daily basis. The interest is then credited to your account at the end of the year (on an annual interest account) or at the end of each month (on a monthly interest account). Usually the annual interest rate is higher than the monthly one. Some people use an account with interest credited monthly when they need a monthly income source for spending.

Mortgage lenders are getting more strict on the percentage they will lend – and some have slightly increased some of their interest rates in recent weeks. The first time buyers – with a small deposit and usually borrowing under 500K – can still get some good deals.

Halifax are still offering a 1 year discounted tracker rate of just 4.55% which rises to 5.1% after the first year. This is available on loand upto and including 95% of the value of the property.

There are still some good 2 and 3 year fixed rates too : Bank of Ireland and ICS have a 2 year fix at 4.65% – which then goes to a tracker of ECB plus 1.25%. Available on upto 92% LTV.

Get them while you can.

NIB still have the best rates on LTVs of 80% or less.

The latest consumer price index from the Irish Central Statistics Office reveal the annual rate of inflation has increased to 5% during March from 4.8% during February.

Higher prices for transportation fuel as well as increases in air fares, mortgage repayments, and home heating oil were the main factors behind the increase.
Two months ago Ireland’s inflation rate was down to 4.3% and most forecasters predicted it would ease considerably further throughout the year.

What has happened since then is that food and energy prices have risen globally and a significant knock on effect on consumer prices has been unavoidable.

Latest figures show that overall the cost of housing electricity and other fuels has risen by 12.3% in a year, while the overall cost of food and non-alcoholic beverages is up by 9.3%.

The cost of bread is up 20% in a year, flour is up 42%, milk is up 31%, mortgage repayments are up 22%, while petrol and diesel are up 12% and 17% respectively.

Irish Nationwide have finally joined the other banks and building societies and launched a Regular Saver account. The interest rate is 7.35% – the best of all the regular saver accounts at the moment – and is guaranteed to be ECB+3.35% until 31/3/2009. After that it is guaranteed to be then ECB+1% until 31/12/2010 – which is still quite good.
The minimum payment is €100 a month , Max is €1,000 per month.
Initial payment must be the same as subsequent payments.
Contribution amount can be altered once every 6 months.
Upto 2 withdrawals per year; subsequent withdrawals are subject to 30 days interest penalty on the amount withdrawn.
See Best Buys for regular savings accounts

The average savings per Credit Union member in Ireland was €4,620 in 2007. Total Irish Credit Union savings were at 13.4 billion euro. These figures are from the annual report of the Irish League of Credit Unions – which represents 521 credit unions in the Republic and Northern Ireland.

More than 78% of credit unions paid dividends of between 2% and 3.99% to members last year, while another 4% paid between 4% and 5.99%.

Credit Unions have only a discretionary savings protection scheme in place if they go bust. Quote from the ILCU
“The Savings Protection Scheme protects the individual savings of members by making sure that the credit unions are financially and administratively sound and by providing remedial help to any credit union which shows signs of weakness in these areas. Participation in the Savings Protection Scheme does not confer any legal right on a credit union to receive any financial assistance under the Scheme. Provided assistance is given under the Scheme the savings of individual credit union members may be protected up to a maximum of €12,700″

Nothing definite mentioned – and only 12700 euro is the maximum amount protected. Make your own minds up…

Lowest Prices for Home Insurance in Ireland – April 2008

See our most recent house insurance price comparison here

In March 2008 the  Financial Regulator did a comparison survey of Home Insurance . Only the following insurance companies were involved in the survey.

Royal & Sun Alliance ,Quinn Direct ,Eagle Star , Hibernian , Allianz , FBD and AXA

The survey involved comaping quotes for contents and /or buildings insurance for different types of properties in various parts of the country for people of different profiles.
The survey was carried out on a farly small sample – so the results can only be used as a guide. You need to obtain quotes for yourself to ensure you get the best deal.

No single insurer was the cheapest in every case – but Royal and Sun Alliance came out best overall in the survey – coming out the cheapest in half of the samples. The average quote from RSA was 267.5 Euro – compared to the highest average of 353.13 Euro from AXA Insurance.
In one quote for a Guesthouse – there was a difference of 365 euro a year between the best price from Royal Sun Alliance (415) and the worst (Hibernian at 781).
In another example the price from Allianz was almost double that from RSA ( 158 compared to 301). This was for insuring a re-furbished 2 bedroom detached cottage in County Monaghan. The rebuilding cost was €120,000 and the contents were worth €55,000.
The biggest percentage difference was for contents insurance for a 2 bed apartment in Beaumont, Dublin 9. The contents are worth €20,000. Royal Sun Alliance quoted €69 while AXA quoted 153. This is a 55% saving - which could be a lot to a poor student.

Each time the Regulator does a survey on home insurance – they seem to use different profiles and properties. So each time the results are different. This may be intentional – so as to avoid appearing to favour one insurer over another?
In previous surveys Quinn and FBD have done well – but the personal profiles used were not the same .

Summary of results: (using average quote over the 8 samples)
Best : Royal and Sun Alliance
2nd Quinn Direct
3rd Eagle Star
4th Hibernian (did not quote on of the 1 sample)
5th Allianz
6th FBD
7th AXA