- Savings are accounts than can be held at a bank or credit union. Savings usually have higher interest rates than deposits. Interest growth is on monthly, six month or yearly anniversaries.
- Savings 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.
- Savings can have some withdrawal restrictions of a week or so.
- Interest is usually subject to DIRT and PRSI.
- Access to funds is quite easy and there are no explicit charges.
- Savings are suitable for investors who need readily accessible emergency funds; allocation of a portion of portfolio to meet diversification goals; risk-adverse investors; and looking for a higher rate than deposits.