We need a good home for our savings of €450 every month

Q

I took your advice from a radio broadcast last year and completed our first budget plan; we now find that we can actually save €450 every month. Can you now tell us where is the best place to invest these funds? We have two children, aged five and three, with both of us working. We also have separate bank current accounts – is it worth our while amalgamating?

Thanks, Gerry – Limerick

A

WELL done Gerry on doing the budget. Just 10% of us bother doing one at this time of year. Your monthly income no doubt is being sent to your respective bank current accounts. It is certainly worth having a joint account if you are both being charged fees on your single accounts.

Some of the banks waive fees if you keep a certain balance in the account at all times or lodge a minimum amount every month. Permanent TSB seems to have the best deals on the market at the moment.

The Competition and Consumer Protection Commission has a good current account comparison page – www.ccpc.ie/ consumers/money-tools/ current-account-comparison/ – on its website. You should save, however, in either a regular saver account or regular stock market saver account with surplus funds.

So, that €450 should be saved every month. Rates for the regular saver accounts are 2.5% and 2% (AIB, Bank of Ireland), while average annual growth in the stock market from 1991 to 2020 at 10.72% makes the stock market regular saver accounts that bit more interesting. All other institutions offer these regular saver deposit accounts but at lower rates. Ideally, the regular saver deposit account (with which you are not allowed to invest lump sums, only amounts between €100 and €1,000 per month for a maximum of 12 months, then you start all over again) should be separate from your current account location, making it a little more difficult to access.

With €42,000 required to send one child through third-level, it makes sense to plan and save now!