For several years now, the European Central Bank has been driving down the cost of money. This is good news if you have a mortgage, especially a tracker mortgage or a standard variable rate mortgage. But it is not very good if you have a lot of cash on deposit.
So, with rates as low as they are, what might be some other ways depositors can put their money to use.
Here at St. Joseph’s Irish Airports & Aviation Credit Union, we have a few ideas:
1. Pay off high-interest debt – especially if you have credit card debt. Since credit cards charge interest that ‘compounds’ each and every month, this means that your debit will take far longer to repay…and cost a lot more!
2. Pay extra off your mortgage – in case you did not know it, the longer the term on your mortgage, the more interest you will pay. So, regardless of whether you have a tracker or standard variable rate mortgage, when interest rates eventually rise, this will make your mortgage more expensive so if you have the cash, it might be a good idea to pay off a lump-sum amount or pay off a little extra each month. Check with your mortgage provider if they will even accept payments bi-weekly. Also, fixed rate mortgages usually incur pre-payment penalties so check carefully if mortgage lenders offer any pre-payment facilities for fixed-rate mortgages.
3. Consider those tax-free gifts – The first €3,000 of the total value of all gifts received from one person in any calendar year is exempt. For further information, check out www.revenue.ie or www.citizensinformation.ie.
4. Invest in your home – home prices are rising rapidly across many areas in Ireland so keeping your home in tip-top shape is a good way of protecting your most valuable source of personal wealth…and there are tax benefits too under the Home Renovation Incentive (HRI).
5. Enjoy life – and have a little fun!