WHAT IS THE BEST LONG TERM RATE FOR SAVINGS?

QCould you please advise me about long term interest rates where my money would not be at risk?

ACheck out An Post. The good old reliable post office used to be the mainstay of the savings market with its range of tax-free deposit options.

In recent years it was overshadowed by certain banks that lured savers with rates of up to 4% – KBC and Nationwide UK (Ireland) – for regular savings and up to 2.3% on demand.

Alas, true to form, these rates proved to be temporary marketing gimmicks and soon plummeted even though general market rates hardly budged.

Now An Post is back in the picture with the best rates over the long term.

These rates are tax-free too, which makes them considerably higher in reality if you’re subject to Deposit Interest Retention Tax.

The best long term rate by far is the 1.5% a year tax-free – or 16% in total – for An Post’s 10-Year Solidarity Bond.

To get that rate you must lock your money away for ten years.

But as with most An Post products, you can get access if you need to at seven days notice, albeit with a much lower interest rate paid depending on when you take it out.

As regards, banks, I’m afraid they have let savers down badly with paltry and/or unreliable deposit rates.

Former market leader Nationwide UK has scarpered back across the Irish Sea and KBC’s rates have been dropping like a stone. This week it announced it will cut its formerly market-leading regular saver account rate once more from 1% to just 0.5% from August 4.

Its Smart Access Demand Account will fall by 0.15% to just 0.3%.

Because of this trend, we don’t list regular savings or long-term bank interest rates in our Best Buys table any more.

These rates are not much better than on-demand rates (See Best Buys). So there’s not much incentive to justify locking your money away with a bank. With the end of the interest rate cycle in sight – rates are expected to start edging up next year – it might be best to keep your cash on demand or stash it in the post office.

QI am sale agreed on a house but I don’t intend to live in it for long. How long do I have to live there before selling it on to avail of the capital gains tax exemption on it as my principal private residence.

AThe Revenue Commissioners do not seem to specify a timeframe – only that it must be your principal private residence during the period of ownership. To prove that it’s your PPR, you should make it your official address for bank statements etc for your period of ownership. I imagine it will take months to sell anyway, so you should be there for a reasonable amount of time.

QI have my car up for sale for €12,000 – that’s quite a lot of money. What’s the safest way to accept payment? Friends say I should get a bank draft. But how do I know if it’s genuine?

AThere’s quite a lot of fraudulent activity involving car-trading so you’re right to be careful. A bank draft is the normal means of transferring cash. But, as you said, how do you know it’s genuine? Why not arrange to do the handover of the draft in your bank? When you deposit the draft and it’s accepted, then you can hand over the keys to your car.