Blog – David McCarthy on Galway Talks – 24.01.13

ISSUE:  Deposit Rates to fall further in 2013.

 I have been receiving a lot of enquirie’s from listeners regarding the fall in Deposit Rates.  This is something I predicted over the last year and unfortunately they are likely to fall further.

For example last year you would receive in excess of 4% gross for a 1 year deposit that has now fallen to circa 2.8%.  There are enormous sums on deposit in the Irish Banks, which were derived from a variety of sources.  Primarily people placed monies on deposit in the last number of years out of ‘fear’ due to the turmoil experienced in the financial world.

We have now reached the situation where the reason for this ‘fear’ has dissapated dramatically.  Leaving monies on deposit is not an appropriate ‘Investment’ decision but rather one people should only utilize for ‘convenience’.

As I said many times there are a number of Capital Guaranteed alternatives for periods ranging from 3 to 5 years which may be more suitable.

Question:  I am self employed and have a pension plan which I have not contributed to for a number of years.  I am unhappy with the investment performance and I am wondering is there anything I can do to improve it?

Answer:  Whether or not you are contributing to a pension plan it is important to review how the monies you have accumulated are invested.  Proceeding blindly until retirement without carrying out such a review is a foolish one.  I would therefore recommend that this listener gets professional advice on what are his best options.

Question:  I took out a loan in 1998 with Bank of Ireland for a period of 10 years.  They took the deeds of some land as security and also insisted that I take out life cover.  Was it necessary for me to take out this life cover?

Answer:  Unfortunately if it was part of the terms and conditions, and I assume this is the case, then there is nothing you can do but proceed with the life cover as requested by the bank at the time.  I am assuming that the loan is now completed and if you still have the life policy in place and do not have a need for same then you can always cancel it.