- Deposits are current or demand accounts held at a bank or credit union. Returns on deposits are paid out as interest and pay either monthly or at the end of a term. Interest rates are based on ECB rates.
- Deposits do not keep up with the rate of inflation so this would be considered a risk. Since rates are based on ECB rates, there is also a risk of interest rates changing and no longer meeting your financial objectives.
- Another risk is that the bank or financial institution could default, however deposits are covered up to €100,000 by the Deposit Guarantee Scheme.
- Typically with deposits, there is no term in time.
- Interest is usually subject to DIRT and PRSI.
- Access to funds is quite easy and there are no explicit charges.
- Deposits are suitable for investors who need readily accessible emergency funds; allocation of a portion of portfolio to meet diversification goals; and risk-adverse investors.